As you can see in the highlighted section above at 8 units produced Company A achieves profit maximization because at any point after that additional units produced causes a decline in profit. The second approach to profit maximization through total revenue and total cost is graphically. A graph is provided below to illustrate.…
(b) Find the quantity that maximizes revenue. Verify it is a maximum. What is the…
Draw a graph (the uc / MPK graph) depicting the state of affairs and label this initial profit maximizing point as point A.…
Antons Trifonovs HW 1,3,4,5,7 9/29/2014 1. Variable Costs CD package and disc (direct material and labor per CD)---- $1.25/CD songwriters royalties $0.35/CD recording artist royalties $1.00/CD Total Variable Costs per Units = $2.60 Fixed Costs advertising and promotion $275,000 studio recording overhead $250,000 Total Fixed Costs = $525,000 a)contribution per CD unit $9 - $2.60 = $6.40 b)break-even volume in CD units and dollars 525,000 / 6.40 = 82,031.25 units 82,031.25 x $9 sales price = $738,281.25 Dollars c)net profit if 1 million CD's are sold (1,000,000 - 82,031.25) x 6.40 = $5,875,000 d)CD unit volume necessary to achieve a $200,000 profit (525,000 + 200,000) / 6.40 = 113,281.25 units 3. Rash-Away: Contribution Margin = $2.00 - $1.40 = 30% $2.00 Absolute Increase in Unit Sales = $150,000 = 250,000 units $.60 Absolute Increase in Dollar Sales = $150,000 = $500,000 .30…
In this lesson we was given this problem to work out, “A chain store manager has been told by the main office that daily profit, P, is related to the number of clerks working that day, x, according to the function P=-25x2+300x. What number of clerks will maximize the profit, and what is the maximum possible profit?” In order to solving this problem it requires all the following steps listed below (Dugopolski, M. 2012).…
1-14 : Gina Fox has started her own company, Foxy Shirts, which manufactures imprinted shirts for special occasions. Since she has just begun this operation, she rents the equipment from a local printing shop when necessary. The cost of using the equipment is $350. The materials used in one shirt cost $8, and Gina can sell these for $15 each. (a) If Gina sells 20 shirts, what will her total revenue be? What will her total variable cost be? (b) How many shirts must Gina sell to break even? What is the total revenue for this? 1-15 : Ray Bond sells handcrafted yard decorations at county fairs. The variable cost to make these is $20 each, and he sells them for $50. The cost to rent a booth at the fair is $150. How many of these must Ray sell to break even? 1-16 : Ray Bond, from Problem 1-15, is trying to find a new supplier that will reduce his variable cost of production to $15 per unit. If he was able to succeed in reducing this cost, what would the break-even point be? 1-17 : Katherine D’Ann is planning to finance her college education by selling programs at the football games for State University. There is a fixed cost of $400 for printing these programs, and the variable cost is $3. There is also a $1,000 fee that is paid to the university for the right to sell these programs. IF Katherine was able to sell programs for $5 each, how many would she have to sell in order to break even? 1-18 : Katherine D’Ann, from Problem 1-17, has become concerned that sales may fall, as the team is on a terrible losing streak, and attendance has fallen off. In fact, Katherine believes that she will sell only 500 programs for the next game. If it was possible to raise the selling price of the program and still sell 500, what would the price have to be for Katherine to break even by selling 500? 1-19 : Farris Billiard Supply sells all types of billiard equipment, and is considering manufacturing their own brand of pool cues. Mysti Farris, the production…
Rap music over time really has started to downgrade females. In the rap world, women are just accessories to the male rappers. Many females don’t pay attention to the lyrics, but to the beat of the song. If they were to listen to the lyrics, they would realize how degrading it is. Women should be respected more instead of called out of their name.…
b. If you round the values in the changing cells to the nearest integer, is the resulting solution still feasible?…
d) Draw a figure showing equilibrium price and quantity as in part (a) and part (c).…
b)Suppose we have two goods. Price of good 1 is $10 and the price of good 2 is $15. The income is $30. Construct a diagram, with the quantities on the X-and Y-axis, and draw a budget line in the diagram.…
The standard weight of a special purpose brick is equal to 5kg and it contains two basic ingredients B1 and B2. B1 costs Nu. 5 per kg and B2 costs Nu.8 per kg. Strength considerations dictate that the brick should contain not more than 4kg of B1 and minimum of 2kg of B2. Since the demand for the product is likely to be related to the price of the brick, find out graphically the minimum cost of the brick satisfying the above condition.…
The price P per unit at which a company can sell all that it produces is given by the function P(x) = 300 — 4x. The cost function is c(x) = 500 + 28x where x is the number of units produced. Find x so that the profit is maximum.…
Introduction Overview Short-Run Profit Maximization Problem Definitions Short-Run Profit Maximization Problem Solution to Short-Run Profit Maximization Problem Example Interpretation Comparative Statics Long-Run Profit Maximization Problem Solution to Long-Run Profit Maximization Problem Tangency Condition & Technical Rate of Substitution Factor Demand Returns to Scale and Profit Mazimization Problem Summary…
The question mentions that the Caleb’s firm is monopoly so we can use the equation Marginal revenue = Marginal cost to calculate the profit-maximizing output level.…
1. Based off of the calculation done above the company could realize a profit of $115,800 by producing outlined quantities. W0005X is the most profitable product. I would fulfill the customer’s order as promised. The capacity of the winding department is underfunded. This department is making a lot of errors trying to keep up with production capacity. More hours need to be allocated to winding to reduce errors and increase efficiency. The decrease of the 5% rework product would increase profit. The addition of capacity in the winding department would decrease the rework percent.…