econ Essay

QUESTION 4: Kai decides to add color and keep his price the same. This will increase variable costs by $0.40 per issue. What will be the new unit volume (copies per issue) required to maintain $500 profits and cover the increased fixed and variable costs?

1- The total unit cost = Total Variable Cost + Production Fixed Expenses + Advertising Expense + Selling and Administrative Expense = 3.23 + 1.20 + 0.30 + 0.19 = 4.92.

10. If 12,500 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?

Total cost = (F * T/Q) + (H * Q / 2) = (80 * 200,000 / 10,000) + (1.00 * 10,000/2)

Explain how a profit maximizing firm determines its optimal level of output, using marginal revenue and marginal cost as criteria:

Refer to Table 7-8. If Evan, Selena, Angie, and Kris sell the good, and the resulting producer surplus is $700, then the price per unit must have been

Apple juice and orange juice are substitutes for consumers, so the fall in the price of apple juice decreases the demand for orange juice. The demand curve for orange juice shifts leftward. The increase in the wage rate paid to orange grove workers raises the cost of producing orange juice. The supply of orange juice decreases and the supply curve of orange juice shifts leftward. The net effect of these events decreases the equilibrium quantity but has an undetermined effect on equilibrium price. If supply decreases by more than the demand, the shift in the

The revenue is $600,600*1.2= $720,720. The variable cost changes as sales increases and fixed cost stays the same, the gross profit is $175,500. After tax, the net income is $100,557.

3) Using the budget Data, what was the total expected cost per unit if all manufacturing and shipping overhead (both variable and fixed) were allocate to planned production? What was the actual cost per unit of production and shipping?

Production in factories is carried out in batches, where each batch is an integer number of drums set by you. The cost to produce one batch equals $1500 plus the number of drums in the batch times $1000. For example, the cost to produce a batch of 10 drums is $1500 + (10)$1000 = $11,500.

Because of the supplies decrease from s1 to s2, profit shift from profit1 to profit2.

B) no government regulations exist. C) demand curves are perfectly horizontal. D) suppliers will supply any amount that buyers wish to buy. Answer: A 19) Once an equilibrium is achieved, it can persist indefinitely because A) shocks that shift the demand curve or the supply curve cannot occur. B) shocks to the demand curve are always exactly offset by shocks to the supply curve. C) the government never intervenes in markets at equilibrium. D) in the absence of supply/demand shocks no one applies pressure to change the price. Answer: D 20) If price is initially above the equilibrium level, A) the supply curve will shift rightward. B) the supply curve will shift leftward. C) excess supply exists. D) all firms can sell as much as they want. Answer: C 21) An equilibrium in a market is described by A) a price only. B) a quantity only. C) the excess supply minus the excess demand. D) a price and a quantity. Answer: D 3

Problem #2.” (To make your life easier, optimal stocking quantity, Q, is computed by the

d) The opportunity cost should be calculated as the resource cost of producing the input.

Computer Company F’s Net Income is 3.3% of its total sales, while Computer Company E’s Net Income is 6.2% of its total sales. Computer Company F’s lower net income could be a result of its “beginning to recover from a dramatic decline in its market share”, which is why I believe Computer Company F is Company 2.