Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
am. 133.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by stepSolved in 2 steps
Knowledge Booster
Similar questions
- A firm that sells e-books - books in digital form downloadable from the Internet - sells all e-books relating to do-it-yourself topics (home plumbing, gardening, and so on) at the same price. At present, the company can earn a maximum annual profit of $35,000 when it sells 10,000 copies within a year's time. The firm incurs a 35-cent expense each time a consumer downloads a copy, but the company must spend S150,000 per year developing new editions of the e-books. The company has determined that it would earn zero economic profits if price were equal to average total cost, and in this case it could sell 20,000 copies. Under marginal cost pricing, it could sell 100,000 copies. In the short run, to the nearest cent, what is the profit-maximizing price of e-books relating to do-it-yourself topics? $ 18.85. At the profit-maximizing quantity, to the nearest cent, what is the average total cost of producing e-books? Sarrow_forwardTim Marlow, the owner of The Clock Works, wanted to know how many clocks he must sell in order to cover his fixed cost at a given price. Tim knew that he had a fixed cost of $20,000 for equipment, taxes, and a bank loan. He also had a unit variable cost of $20 per clock for labor, materials, and promotional costs. If the price Tim charges for each of his clocks is $40, what is his break-even point quantity?arrow_forwardQ3arrow_forward
- A local newspaper currently has 84,000 subscribers at a quarterly charge of $30.Market research has suggested that if the owners raise the price to $32, they wouldlose 5,000 subscribers. Assuming that subscriptions are linearly related to theprice, what price should the newspaper charge for a quarterly subscription tomaximize their revenue?a) Find the cost function (Hint: find slope and use point-slope form to find thecost function) b) Find the revenue function c) Find the maximum revenue d) Find the profit functionarrow_forwardOnly typed solutionarrow_forwardA firm that sells e-books - books in digital form downloadable from the Internet - sells all e-books relating to do-it-yourself topics (home plumbing, gardening, and so on) at the same price. At present, the company can earn a maximum annual profit of $45,000 when it sells 20,000 copies within a year's time. The firm incurs a 30-cent expense each time a consumer downloads a copy, but the company must spend $125,000 per year developing new editions of the e-books. The company has determined that it would earn zero economic profits if price were equal to average total cost, and in this case it could sell 20,000 copies. Under marginal cost pricing, it could sell 100,000 copies. In the short run, to the nearest cent, what is the profit-maximizing price of e-books relating to do-it-yourself topics?arrow_forward
- You are in charge of improving utilization of resources at a restaurant that is taking only online orders for delivery to the specific addresses. There are three kind of orders received: vegetarian, non-vegetarian and gluten free. For every vegetarian order, the chopping and dicing section, the deli-cheese section, the stir fry kitchen, and marination are used. For non-vegetarian orders; the chopping and dicing section, the deli-meat section, the marination section, and the non-veg kitchen is used. In addition to this 50% of non-vegetarian dishes go through the grilling section while the other 50% go through the baking (oven) section. Gluten free dishes go through the chopping and dicing section and the stir fry kitchen only. The typical order size consists of 25 non-veg orders, 12 veg orders and 5 gluten free orders. Marination of vegetarian dishes take 5 minutes while that of non-vegetarian dishes 1 hour. Chopping and dicing for 10 vegetarian/gluten-free dishes take an hour, while…arrow_forward"The Hickory Cabinet and Furniture Company makes chairs. The fixed cost per month of making chairs is $7,500, and the variable cost per chair is $40. Price is related to demand, according to the following linear equation: v = 400 - 1.2p Graphically illustrate the profit curve developed . Indicate the optimal price and the maximum profit per month.arrow_forwardKasey Puzzle, Inc. sells geography-based puzzles. Kasey currently sells 25,000 units a month for $40 each, has variable costs of $20 per unit, and fixed costs of $300,000. Kasey Puzzle is considering increasing the price of its units to $60 per unit. This will not affect costs, but demand is expected to drop 20%. Should Kasey Puzzle increase the price of its product? с Multiple Choice O O Yes, profit will increase $500,000. No, profit will decrease $500,000. No, profit will decrease $300,000. Yes; profit will increase $300,000.arrow_forward
- Tom, the only steel drum manufacturer in Narnia, can sell a single drum for $30. However, for every extra drum he wants to sell, he is forced to reduce the price (for all his customers) by $2. The total fixed costs in his workshop are $15, and the variable cost of the first drum produced is $25. For each extra drum thereafter, the cost drops by $5 up to, and including, the fifth drum. After that, the cost of each extra drum increases by $5. What is Tom's profit-maximizing output, price, and total profit or loss? Output: Price: $ Profit/loss: $arrow_forwardSuppose that the company is willing to consider dropping the distribution centerlimitations; that is, customers could be served by any of the distribution centers forwhich costs are available. Can costs be reduced? If so, by how much? show all excel workingarrow_forwardEconomics of customer acquisition for fedex: 140 accounts in advertising industry use 2,285 courier paks (cp) per month cp price is $12.50 and variable cost is $4.25 retention rate = 0.9, discount rate = 12% what is the maximum fedex should be willing to spend to acquire a new account in this industry? what is the maximum that fedex should spend/customer per year to increase retention to 0.95? (could you show me it worked out? Thank you!) Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning