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
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Question
Chapter 9, Problem 2E
a
To determine
To find:Level of total assets that minimizes the average operating expense ratio.
b)
To determine
To ascertain: The average operating expense ratio for a saving and loan associated with level of total assets.
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Savannah is running a picture-framing business. Refer to the given break-even chart for her
business and answer the following questions. Round off all values to the nearest whole number if
required.
90+
85-
80
75
70-
65-
60-
55
50
45-
40
35
30
25
20-
15-
10
5-
-5-
a) What is the number of units at break-even?
b) What is the revenue at break-even? $
c) Find the revenue function. TR=
d) Find the cost function. TC =
The profit of a company, in dollars, is the difference between the company's revenue and cost. The cost, C(x), and revenue, R(x), are functions for a particular
company. The x represents the number of items produced and sold to distributors.
C(x)=-2300+40x
R(x)=840x-x²
a) Determine and simplify the profit function. Write your answer in descending order.
P(X)-
BPO Services is in the business of digitizing information from forms that are filled out by hand. In 2006, a big client gave BPO a distribution of the forms that it digitized in house last year, and BPO estimated how much it would cost to digitize each form.
Form Type
Mix of Forms
Form Cost
A
0.2
$0.80
B
0.2
$0.40
C
0.2
$0.40
D
0.2
$1.60
E
0.2
$0.80
The expected cost of digitizing a form is $__________-
.
Suppose the client and BPO agree to a deal, whereby the client pays BPO to digitize forms. The price of each form processed is equal to the expected cost of the form that you calculated in the previous part of the problem.
Suppose that after the agreement, the client sends an equal mix of forms of types D and E only.
The expected digitization cost per form of the forms sent by the client is $___________
. This leads to an expected loss of $__________ per form for BPO. (Hint: Do not round your answers. Enter the loss as a positive number.)
Chapter 9 Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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