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- ***If the demand function is: P+ 2Q = 50 The fixed cost is 30, the variable cost per unit is: Q +3 Find the value of Q that break even O a. Q=0.67, Q=15 O b. Q=0.55, Q=13 Oc. Q=0.26, Q=15 O d. Q=0.67, Q=19 e. None of the aboveA local company is planning to manufacture and market a four-slice toaster. For this toaster, the research department’s estimates are aweekly demand of 300 toasters at a price of $25 per toaster and a weekly demand of 400 toasters at a price of $20. The financial department’s estimates are fixed weekly costs of$5,000 and variable costs of $5 per toaster. a) Assume that the relationship between price ? and demand ? is linear. Use the research department’s estimates to express ? as a function of ? and determine the domain of the function. b) Using your knowledge from Finite Math, determine the Revenue function in terms of ?. c) Determine the Marginal Revenue at 2 different production levels for example 250 and 500 units. Interpret these results. (HINT: Consider what a positive or negative first derivative implies) d) Assume that the cost function is linear. Use the financial department’s estimates to express the cost function interms of ?. e) Determinethe Marginal costand interpret the…A firm sells its product i two different markets. the inverse demand in market A is PA=72-5QA & in market B, it is PB=60-3QB.it has fixed cost of 72.each unit it produces costs 12 that is marginal cost equals 12.to maximize profits, what quantities of output will be sold in each market & what will total profits be?
- 2. A refrigerator manufacturer is planning capacity expansions. They have determined that their capacity cost follows the equation below, where f(y) = kya, is the cost of a plant that can produce y units annually. f(y) = 0.0107y⁰.62 They have determined that when a = 0.62, using a = u/(e" - 1) gives a value u = 0.89. Their demand for refrigerators is growing at a rate of 5000 units annually, and they use a 16% interest rate for discounting. At the optimal capacity addition level, what does each capacity installation cost?Kyle's Fabric Inc. agreed to supply 50 bolts of fabric to Fabric Stores Ltd. for a price of $50 per bolt. Shortly after the contract came into effect, the market price of this fabric rose to $75 per bolt so Kyle's Fabric Inc asked for more money. Fortunately, Fabric Stores Ltd. was agreeable to paying the new higher price. Why might Fabric Stores Ltd's promise to pay an additional $25 per bolt be unenforceable? 1) the inadequate consideration given to Kyle's Fabric Inc. for the promise to pay the price increase 2) the absence of consideration or a seal for the promise to pay the price increase 3) the inadequate consideration given to Fabric Stores Ltd. for the promise to pay the price increase 4) the absence of consensusA profit-maximizing firm will: O reduce employment if VMPL exceeds MCL. O expand employment if the VMPL exceeds MCL. O reduce employment if VMPL equals MCL. O expand employment if VMPL equals MCL
- A firm produces a steel bar. When the price of the steel bar is $ 30,000, the quantity demanded is 8 metric tons, a 100% change in the price would change the quantity demanded by 25%. REQUIRED: A. What is the total revenue function of the firm? (Use the variable Q for the quantity and the variable TR for the total revenue B. What is the price function of demand of the firm? C. How much would be the maximum total revenue of the firm? D. At what price should the firm sell its product to maximize its total revenue? F. What is the marginal revenue function of the firm? (Use the variable Q for the quantity and the variable MR for the marginal revenue G. At what production output should the firm produce to maximize its total revenue? H. What is the demand function of the firm? (Use the variable Q for the quantity demanded and the variable P for the price1. Estimated Demand. You are the manager of a firm that sells packs of coffee pods for coffee makers. You typically sell the packs for $24 and sell an average of 2,470 packs per month. You decide to raise the price to $28 per pack. When you do this your monthly sales fall to 1,482 packs per month. a. Assuming that your firm’s demand function is linear (i.e., takes the form QP=a-bP), calculate the linear demand function for the packs 2. Markups and elasticities. The marginal cost (MC) of producing your product is $16 a. Using the estimated demand curve from the previous question, calculate the point price elasticities of demand at the two price from question 1 b. Use the markups and elasticities and indicate whether the two prices are higher or lower than the profit maximizing price. NOTE: YOU DO NOT NEED TO CALCULATE THE PROFIT MAXIMIZING PRICE YET.A manufacturer knows that: His TR is given by Revenue = 23Q – Q2 His total cost of production is; Cost = 36 + 2Q + 0.1Q2 Where Q is the weekly production in thousands a) Economists define MR as the rate of change of Total revenue. Derive an expression for Marginal Revenue (MR) b) How do you think Economists’ would define ‘Marginal Cost’? Derive an expression for marginal Cost (MC) c) What output will make marginal Revenue equal Marginal cost?
- The selling price of a certain type of computer is RO 1,000, and the annual holding cost is 30% of the value of the item. The monthly demand is 1000 units, and the order cost is RO 150 per order. What is the approximate economic order quantity? Round-up to the nearest integer a. 90 O b. 50 O c. 120 O d. None is correct O e. 110(b) You are the CEO for a lightweight compasses manufacturer. The demand function for the lightweight compasses is given by p 40 – 4q²where q is the number of lightweight compasses produced in millions. It costs the company $15 to make a lightweight compass. (1) Write an equation giving profit as a function of the number of lightweight compasses produced. (11) At the moment the company produces 2 million lightweight compasses and makes a pre of $18,000,000, but you would like to reduce production. What smaller number of lightweight compasses could the company produce to yield the same profit? Σ BIUG G |卡 三 = 9 ..(19) If a firm is a price taker, then the demand curve for a single firm is Select one: a. perfectly inelastic. b. perfectly elastic. c. the same slope as market demand. (20) A profit-maximizing decision must be made about whether to keep a bed & breakfast operating. Until the place sells, the mortgage of $3000/month, a sunk cost, must be paid. If the bed & breakfast operates, costs rise by $4000 per month, but revenue will be only $6000 per month. Until the building can be sold, Select one: a. it is best to ignore sunk costs and keep the bed & breakfast operating. b. It is best to shut down the bed and breakfast since it is taking a loss. c. it is best to keep the bed & breakfast operating because it is profitable.