You are a newspaper publisher. You are in the middle of a one-year factory rental contract that requires you to pay $500,000 per month, and you have contractual salary obligations of $1,250,000 per month that you can't get out of. You also have a marginal printing cost of $0.25 per paper as well as a marginal delivery cost of $0.10 per paper. Instructions: Enter your answers rounded to two decimal places. a. If sales fall by 20 percent from 1,000,000 newspapers per month to 800,000 newspapers per month, what happens to the AFC per newspaper? AFC per newspaper (Click to select) from $ to $ b. What happens to the MC per newspaper? MC per newspaper (Click to select) c. What happens to the minimum amount that you must charge to break even? It (Click to select) v from $ to $

You are a newspaper publisher. You are in the middle of a one-year factory rental contract that requires you to pay $500,000 per month, and you have contractual salary obligations of $1,250,000 per month that you can't get out of. You also have a marginal printing cost of $0.25 per paper as well as a marginal delivery cost of $0.10 per paper. Instructions: Enter your answers rounded to two decimal places. a. If sales fall by 20 percent from 1,000,000 newspapers per month to 800,000 newspapers per month, what happens to the AFC per newspaper? AFC per newspaper (Click to select) from $ to $ b. What happens to the MC per newspaper? MC per newspaper (Click to select) c. What happens to the minimum amount that you must charge to break even? It (Click to select) v from $ to $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 37 [ DIFFICULT] Consider two firms, both producing the same product, using the same production technology given by: q = √√K This production technology implies the following MRTS: K MRTS=AY ΔΧ L where K is the amount of capital used and L is the amount of labour used to produce output. It can be shown that this production technology implies the following minimised total cost function: TC = 2q√w√r where w represents the per-unit cost of labour and r represents the per-unit cost of capital. Suppose each firm can hire labour at $1 per unit and capital at $9 per unit. Each firm produces 90 units of output. One firm (Firm 1) chooses its input combination to minimise costs of production. However, Firm 2 instead produces output using twice as much labour as Firm 1. Compared to Firm 1, how much higher are Firm 2's cost of production? a) $270 b) $67.50 c) $275 d) $135 e) $132 Hint: It can be shown that the cost-minimising quantities of capital and labour (chosen by Firm 1) are K = 30…
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Suppose a local developer has built 24 houses so far this year at a total cost to the company of $4.8 million. If the company builds the 25th house, its total cost will increase to $5 million. Which of the following is correct? - all of the above - the marginal cost of the 25th house, if it is built, will be $200,000 - if the company can sell the 25th house for $250,000, then it should build it - for the first 24 houses, the average cost per house was $200,000
a) Explain what is meant by the terms marginal cost and sunk cost in production theory, and give some examples that can illustrate the concepts.Explain whether these terms are important for a profit-maximizing company that sells a finished item in a market with a fixed market price. b) Production in a business can be described by the product function y = f(v), where y is the number of units produced of the item, and v is the number of units of the input factor. The company can purchase the input factor at a fixed price per unit and has no fixed costs.Suppose that production is characterized by declining scale yield. Explain what it means and what in such a case can be said about the marginal costs enterprise.Use charts to illustrate the scale yield and marginal costs in this case.Pay the close attention to the axis denominations.
QUESTION 16 Refer to Scenario 7.4 below to answer the question(s) that follow. SCENARIO 7.4: You own and are the only employee of a company that sells custom embroidered pet sweaters. Last year your total revenue was $120,000. Your costs for equipment, rent, and supplies were $30,000. To start this business you invested an amount of your own capital that could pay you a $50,000 a year return. Refer to Scenario 7.4. Your economic profit last year was -$20,000. $40,000. $70,000. $90,000.
20.
Amy wants to open a coffee shop and has already rented a coffee retail space on Bloor Street, signing a lease for three months, which includes her expresso-making equipment. The rent is $900 per week and the wage for barristas is $16 per hour. Amy can legally keep her shop open up to 100 hours a week. The number of expresso drinks q Amy’s barristas can make in an hour given the capital on hand, and assuming she doesn’t run out of beans or cups, is given by q = 15L.5 where L is the number of barristas currently working. Amy can provide 50 hours of barrista labor herself instead of hiring a worker if she wants to reduce labor costs, and she could also work 50 hours a week running the coffee shop across the street for $25 an hour. The typical price of an expresso drink is $7, which Amy takes as given since there are many other coffee shops in the neighborhood. The cost of the materials M (cups, beans, and milk) that go into each drink sold is $2.50, and Amy’s coffee bean and cups…
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can you help me solve and give me step by step how you did it, i believe the answer is c=786.6
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Suppose an economy that produces and consumes apples, bread, and toy-cars. In the following table are data for two different years. 2019 2020 Good Quantity Price Quantity Price Apples 50 Rs.50 60 Rs.60 Bread 200 Rs. 20 180 Rs.25 Cars 25 Rs. 100 30 Rs.140 a. Using 2019 as the base year, compute the following statistics for 2019 and 2020 in the table given below: Statistics 2018 2019 GROSS DOMESTIC PRODUCT Nominal GDP Real GDP GROWTH RATE Growth Rate of Nominal GDP Growth Rate of Real GDP PRICE INDICES GDP deflator Inflation rate using GDP deflator - CPI (a fixed-weight price index) Inflation rate using CPI b. How much did the cost of living rise between 2018 and 2019? Compare the answers given by GDP deflator and CPI. Explain the difference. c. Explain which price index (GDP deflator or CPI) should be used to adjust the salaries, budget or spending to counterbalance the changes in the cost of living? Why?
If You are the owner and only employee of a company that writes computer software that is used by gamblers to collect sports data. Last year you earned a total revenue of $90,000. Your costs for equipment, rent, and supplies were $60,000. To start this business you invested an amount of your own capital that could pay you a return of $40,000 a year. then your accounting profit is: Select one: a. 20,000 Ob. 30,000 O c. 40,000 O d. 10,000 O e. 60,000