a. What is the breakeven point for the numerically controlled semi-automatic lathe? b. What is the breakeven point for the machine center? c. Compute the total revenue, total cost, and total profit for each of the 3 options when Q = 500 d. Over what range of demand level (Q) will the buy option be best; the make on semiautomatic lathe be best; make on machine center be best? (show proof/solution for obtaining the values for Q) e. Create a graph showing the total cost lines for the 3 options. Label the graph completely and clearly.

a. What is the breakeven point for the numerically controlled semi-automatic lathe? b. What is the breakeven point for the machine center? c. Compute the total revenue, total cost, and total profit for each of the 3 options when Q = 500 d. Over what range of demand level (Q) will the buy option be best; the make on semiautomatic lathe be best; make on machine center be best? (show proof/solution for obtaining the values for Q) e. Create a graph showing the total cost lines for the 3 options. Label the graph completely and clearly.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Charles Lackey operates a bakery in Idaho Falls, Idaho. Because of its excellent product and…

A: The current output/month= 1800 The current labor input/month= 8×640$=5120$ The current capital…

Q: Tacky Wedding Planners (TWP) are halfway through a year-long contract to lease stretch limousines to…

A: Total cost=ATC+Operating costTC=400+300TC=€700Now,Total revenue=€550Thus,TWP is incuring a loss in…

Q: Mortimer makes picture frames. From the consumers' perspective, his frames are not different from…

A: In a competitive market, firms are price taker. Profit is maximum when the firm produces at P =…

Q: Which operations strategy emphasizes low costs, high volume, and standardized products? a)…

A: Explanation:**a) Differentiation** - This strategy focuses on distinguishing products and services…

Q: firm gets abnormal profit? 2- based on your answer in question one, what is the amount of total…

A: The graph highlights the perfectly competitive firm, as price curve is horizontal in this market…

Q: $28 500 $20 600 $11 700 He has a total fixed cost of $2000 per month and has a constant marginal…

A: a) Price per unit Quantity Total revenue Marginal revenue Total cost Marginal cost Profit…

Q: MC ATC 10 MR 5 10 15 20 Quantity (units) Fig 1 Price (dolalrs per unit)

A: Marginal cost is the amount of dollars incurred by an organization on making an increment unit of…

Q: respectively. 1. Until question 5, we consider a "feebate" or "Clean Car Discount". That generally…

A: Given Information Demand Function Po = 250 - Qo - Q1/Q2 P1 = 120 -Q1 - Qo/2 Tax To = 20T1 = 20 Cost…

Q: If a firm shuts down, it A) makes zero economic profit. B) incurs an economic loss equal to its…

A: Total cost is the sum of variable cost and the fixed cost. Fixed cost is the cost that remains same…

Q: For the cost and price functions below, C(q) 70+18q; p=62-2q Find the number, q, of units that…

A: The cost function is the mathematical representation of the relationship between the cost of…

Q: Price, P (€); cost 3.70 2.50 2 0 20 O 40 60 80 140 120 100 Quantity of loaves, Q 160 180 Marginal…

A: A collection of curves in the QP-plane known as the isoprofit curves correspond to different levels…

Q: Explain all option compulsory...

Q: Quantity (boxes of cakes) Total variable cost (dollars) 0 0 1 20 2 35 3 50 4 75 5 110 6 160 The…

A: Total cost is the sum of fixed cost and variable cost. Fixed cost is independent of quantity.…

Q: The table below shows the total cost (TC) and marginal cost (MC) for Choco Lovers, a purely…

A: Characteristics of a Purely Competitive(PC) Market:Many sellers and purchasers exist in the…

Q: A company manufactures a smartphones which sell for $r and y portable speakers which sell for $s.…

A: A company manufactures x smartphones and y portable speakers.Price of smartphone is $r and price of…

Q: Assume the following demand curve: Q = 50,400 1,200(P). Variable costs are estimated to be $25.06.…

A: Total revenue and variable costs: Total revenue is the total value of the commodities produced and…

Q: The profit-maximizing quantity is the one at which the marginal revenue of the last unit was: O…

A: The objective of the question is to identify the condition under which a firm maximizes its profit…

Q: A firm will choose to operate rather than shut down as long as: average fixed cost is greater than…

A: Shut-down point:- A shutdown or closure point is a stage in operating process where a corporation…

Q: For the cost and price functions below, find a) the number, q, of units that produces maximum…

A: Profit maximisation is the process by which firms guarantee that their output and pricing levels are…

Q: 4/ Suppose that the total cost of a firm TC(Q) function =: TC(Q) = 75Q + 800 And the demand function…

A: Quantity is denoted by Q and price is denoted by P. Profit = Revenue - Cost Revenue = Price per unit…

Q: Answer the letters (C) and (D) only. Data table is also provided (refer to the photo below). 1.…

A: Output(in packs) AFC(Php) AVC(Php) ATC(Php) MC(Php) 0 1 60 45 105 45 2 30 42.5 72.5 40…

Q: Questions 1-3 below rely on the following assumptions: P = 50 - .25Q MR = 50 - .5Q MC = 8 = Average…

A: Here, given information is: P=50-0.25Q MR=50-0.5Q MC=AC=8 To find: total quantity and total…

Q: A generic firm can make all the following changes in the long run except Select one: a. Leave an…

A: In the long run, the firm try to optimize the level of production and earn economic profit.

Q: onstraint

A: Lagrange multipliers are a mathematical technique used in optimization troubles wherein a feature…

Q: Fixed cost is $100 per day. Suppose that the price at which Katie can sell catered meals is $21 per…

A: FC=100TC=FC+VCAVC=VCQATC=TCQMC=∆TC∆Q By using the above equation and information in the table, the…

Q: Your niece is deciding whether or not to open a lemonade stand. She expects to sell 20 cups of…

A: Answer in Step 2

Q: . The level of output at which average variable costs equal marginal cost and average revenue, or…

A: There are different costs and revenues related to the production process. Average variable cost is…

Q: 3. Maximize the following total revenue TR and total profit functions by i. finding the critical…

A: First order condition for maximization is to find critical value by setting first derivative equal…

Q: A publisher for a promising new novel figures fixed costs (overhead, advances, promotion, copy…

A: Break even Point : Break even point can be defined as a point below which no producer will sell as…

Q: In the parish of St. Elizabeth, you were asked to be the Managing Director of a company that…

A: The cost function is given by: TC=200x+15x2 So MC will be:MC=200+30x and faces the demand function…

Q: MR 10 20 25 40 40 Quantity How much profit will this firm make? D

A: Profit refers to the financial gain or surplus that a firm receives after deducting all costs(C)…

Q: are 1 and the demand function is P= 10 - 20 Obtain an expression for I in terms of Q and, (a) For…

A: *Answer:

Q: When a competitive firm triples the amount of output it sells, C O OO its total revenue triples. its…

A: A competitive market is where thare are various no. of buyers and sellers. The competitive market…

Q: Price and Cost ($ per unit) 20.00 15.75 15.00 12.50 10.00 7.50 5.00 0 MC LO 5 7 8.19 10 Output…

A: The figure shows MR is constant so it is equal to price. It represents perfectly competitive market.…

Q: Revenue and cost (dollars per unit) 50 40 30 20 10 0 10 20 MC ATC AVC 30 40 50 Output (units per…

A: In perfect competition, There exists a large number of buyers and sellers. The firm maximize it's…

Q: any companies start with cost to determine price since revenue must cover cost for the firm to make…

A: Cost-based pricing is a pricing strategy where a business determines the selling price of a product…

Q: ***If the demand function is: P+ 2Q = 50 %3D The fixed cost is 30, the variable cost per unit is: Q…

A: The demand function is P + 2Q = 50 i.e. P = 50 - 2Q The variable cost per unit is Q + 3; i.e. the…

Q: Given cost and price (demand) functions C(q) = 100q + 41,000 and p(q) = - 2q + 890, what price…

A: Marginal revenue is the additional revenue earned after an additional unit is sold.

Q: You are the manager of a bakery that produces and packages gourmet muffins, and you currently sell…

A: The demand function expresses the demand changes due to chang in price and the inverse demand…

Q: 2. Suppose that you have been hired as a consultant to a firm that has estimated its demand curve to…

A: Demand: P = 600-3QTotal Cost: TC = 3200+50Q+2Q2

Q: If money is worth 8% compounded quarterly, calculate the present worth of the following: (a) An…

A: a. Time = 50 years Interest rate = 8 % compounded quarterly Quarterly rate = 8 / 4 = 2 % Therefore…

Q: A firm should enter an industry if total revenue is equal to total cost. a) True b) False

A: The statement in question is suggesting that a firm should enter an industry if its total revenue is…

Question

Suppose that a manufacturer has identified the following options for obtaining a machined part. It can buy the part at $200 per unit (including materials); it can make the part on a numerically controlled semiautomatic lathe at $75 per unit (including materials); or it can make the part on a machine center at $15 per unit (including materials). There is negligible fixed cost if the item is purchased; a semiautomatic lathe costs $80,000; and a machining center costs $200,000 The part is sold at the price of $300 each. a. What is the breakeven point for the numerically controlled semi-automatic lathe? b. What is the breakeven point for the machine center? c. Compute the total revenue, total cost, and total profit for each of the 3 options when Q-500 d. Over what range of demand level (Q) will the buy option be best; the make on semiautomatic lathe be best; make on machine center be best? (show proof/solution for obtaining the values for a) e. Create a graph showing the total cost lines for the 3 options. Label the graph completely and clearly.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define Break Even Point

VIEW

Step 2: Compute the break-even point for the numerically controlled semi-automatic lathe

VIEW

Step 3: Compute the break even point for machine center

VIEW

Step 4: Compute the Total Revenue, Total Cost, Total Profit each if the Sales Quantity (Q) is 500

VIEW

Step 5: Compute at what range which options will be the best

VIEW

Step 6: Graph Showing total cost line

VIEW

Solution

VIEW

Step by step

Solved in 7 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press