Bella bakes delicious cookies. Her total fixed cost is $48 a day, and her average variable cost is $1.20 a bag. Few people know about Bella’s Cookies, and she is maximizing her profit by selling 12 bags a day for $5.50 a bag. Bella thinks that if she spends $60 a day on advertising, she can increase her market share and sell 30 bags a day for $5.50 a bag. If Bella advertises, will her average total cost increase or decrease at the quantity produced?

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Answered: Bella bakes delicious cookies. Her…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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The Acme Widget Company has found that if widgets are priced at $125, then 2700 will be sold each month. They have also found that for every increase of $18, there will be 100 fewer widgets sold each month. The cost to produce each widget is $25 plus the monthly fixed costs are $3800.
A manufacturer sells a product at $8.45 per unit, selling all produced. The fixed cost is $2300 and the variable cost is $7.20 per unit. At what level of production will there be a profit of $5000? At what level of production will there be a loss of $1450? At what level of production will the break-even point occur? There will be a profit of $5000 when the production level is units. ...
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Sara is a 57-year-old graphic designer who wants to retire 5 years from now. She earns $54,000/year and does not expect any raises if she stays in her job. Her daughter has told her about a new job opportunity that would offer a much higher salary, but to become eligible Sara would need to quit her job and spend a year taking classes. If she did that, next year she would earn $0 and pay $42,000 in tuition, and then she would earn $81,000/year for the final 4 years of her career. Sara likes the duties of the two jobs equally well, so this is strictly a financial issue for her. The interest rate is r. Question: How will she decide? Write down the calculation she will make. Would she be more likely to change jobs if the interest rate were higher or lower?
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Dejah earned $100,000 last year at her startup and wants to prepare for potential lean times. She plans to take a 20%20% salary decrease next year and will then take a 20%20% increase in the second year. One of her friends says, "That's not bad, Dejah. You will be back to your original salary in two years." Help Dejah explain to her friend that she will not be making her original salary in two years
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