Analysis of the relationship between cost, price and profit in lignite extraction

Anca Ciumag and Marin Ciumag

MPRA Paper from University Library of Munich, Germany

Abstract: From the point of view of coal consumers, which is visible to the naked eye is the price and size and its size dynamics is necessary for attention to anyone, due the fact that directly or indirectly, everyone in the situation of power buyer. In the area of lignite extraction, it is maintaing the relationship between the cost and profit.The law of demand and supply makes also the demand causes by the price and also the obvious changes in demand lead to changes in production. Production cost level is the critical threshold of profitability and as such, the manufacturers will be willing to supply at a price below cost. Dependence of the price arises also to the cost. At the same time, between the costs and profits, there is an inverse relationship. In order to maximize profits, in the extraction of lignite areas, is required to identify solutions to reduce production costs.

Keywords: cost; price; profit; lignite; production (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Date: 2010-11-27
New Economics Papers: this item is included in nep-agr and nep-ene
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