The El Dorado Star is the only newspaper in El Dorado, New Mexico. Certainly, the Star competes with The Wall Street Journal, USA Today, and the New York Times for national news reporting, but the Star offers readers stories of local interest, such as local news, weather, high-school sporting events, and so on. The El Dorado Star faces the revenue and cost schedules shown in the spreadsheet that follows: A template for the spreadsheet is provided in the Course Materials. You may download my template or create your own. Since we are using dollars and cents, be sure to go out two decimal places on your calculations. Add columns to show, respectively, marginal cost (MC), marginal revenue (MR), and total profit. Dell Computer Corp., the world's largest personal-computer maker, is keenly aware of everything its rival PC manufacturers decide to do. Explain why Dell usually reacts more quickly and more substantially to pricing, product design, and advertising decisions made by Hewlett-Packard and Gateway than when these same types of decisions are made by Apple Computer.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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The El Dorado Star is the only newspaper in El Dorado, New Mexico. Certainly, the Star competes with The Wall Street Journal, USA Today, and the New York Times for national news reporting, but the Star offers readers stories of local interest, such as local news, weather, high-school sporting events, and so on. The El Dorado Star faces the revenue and cost schedules shown in the spreadsheet that follows: A template for the spreadsheet is provided in the Course Materials. You may download my template or create your own. Since we are using dollars and cents, be sure to go out two decimal places on your calculations. Add columns to show, respectively, marginal cost (MC), marginal revenue (MR), and total profit. Dell Computer Corp., the world's largest personal-computer maker, is keenly aware of everything its rival PC manufacturers decide to do. Explain why Dell usually reacts more quickly and more substantially to pricing, product design, and advertising decisions made by Hewlett-Packard and Gateway than when these same types of decisions are made by Apple Computer.
Number of
newspapers
per day (Q)
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Total revenue
(including
advertising
revenues) per day
(TR)
0
4000
5000
5500
5750
5950
6125
6225
6125
5975
Total cost
per day
(TC)
2500
2600
2700
2860
3020
3200
3390
3590
3810
4050
Transcribed Image Text:Number of newspapers per day (Q) 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 Total revenue (including advertising revenues) per day (TR) 0 4000 5000 5500 5750 5950 6125 6225 6125 5975 Total cost per day (TC) 2500 2600 2700 2860 3020 3200 3390 3590 3810 4050
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Use the appropriate formulas to create two new columns (7 and 8) for total profit and profit margin, respectively. What is the maximum profit the EI Dorado Star can earn? What is the maximum possible profit margin? Are profit and profit margin maximized at the same point on demand?

 

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