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Bert, a Self- Employed Attorney, Is Considering Either Purchasing or Leasing

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Essay

Bert, a self- employed attorney, is considering either purchasing or leasing a $80,000 automobile for use in his business. What are the issues he should consider in making his decision?


Definitions:

Marginal Revenue

The revenue enhancement a company experiences by selling another unit of a product or service.

Total Revenue

The total amount of money received by a firm from sales of its products or services, calculated as the quantity sold times the price per unit.

MC < MR

A condition in economic theory where marginal cost is less than marginal revenue, suggesting that increasing production would be profitable.

Profit Maximized

The point at which a firm achieves the highest possible profit margin, where marginal revenue equals marginal cost.

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