A herbal tea producer company has 24 different products in the market, each are produced in one of the 3 factories owned by the company. The weights of the products in monthly sales may vary depending on time of the year (demands of certain products shift to others in each of the 4 seasons), age of the prasducts and market conditions, but yearly aggregate demand has a very strong correlation with the price of the product (Here, we ignore any other factor and assume that the yearly aggregate demand is directly and linearly effected by the price). The company found out that when the price for a packet of 20 herbal tea bags is 10 TL, yearly demand is 252000 packets. When the price increases to 11 TL, demand decreases to 251580 packets. On the cost side, the company has 4600000 TL of yearly administrative costs regardless of the price or the number of units sold, including the rents, depreciation of the buildings and other related assets and salaries of 58 workers (average monthly salary for white-collar and blue-collar workers are 5,000TL and 3,500 TL respectively). Additionally, approximately 139 TL cost per each packet of tea produced and sold (Assume that the total production is equal to total sales for the sake of simplicity). What is the optimal revenue?
A herbal tea producer company has 24 different products in the market, each are produced in one of the 3 factories owned by the company. The weights of the products in monthly sales may vary depending on time of the year (demands of certain products shift to others in each of the 4 seasons), age of the prasducts and market conditions, but yearly aggregate demand has a very strong correlation with the price of the product (Here, we ignore any other factor and assume that the yearly aggregate demand is directly and linearly effected by the price). The company found out that when the price for a packet of 20 herbal tea bags is 10 TL, yearly demand is 252000 packets. When the price increases to 11 TL, demand decreases to 251580 packets. On the cost side, the company has 4600000 TL of yearly administrative costs regardless of the price or the number of units sold, including the rents, depreciation of the buildings and other related assets and salaries of 58 workers (average monthly salary for white-collar and blue-collar workers are 5,000TL and 3,500 TL respectively). Additionally, approximately 139 TL cost per each packet of tea produced and sold (Assume that the total production is equal to total sales for the sake of simplicity). What is the optimal revenue?
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:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter10: Prices, Output, And Strategy: Pure And Monopolistic Competition
Section: Chapter Questions
Problem 9E
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Transcribed Image Text:A herbal tea producer company has 24 different products in the market, each are produced in one of the 3
factories owned by the company. The weights of the products in monthly sales may vary depending on time of
the year (demands of certain products shift to others in each of the 4 seasons), age of the prlasducts and market
conditions, but yearly aggregate demand has a very strong correlation with the price of the product (Here, we
ignore any other factor and assume that the yearly aggregate demand is directly and linearly effected by the
price). The company found out that when the price for a packet of 20 herbal tea bags is 10 TL, yearly demand is
252000 packets. When the price increases to 11 TL, demand decreases to 251580 packets.
On the cost side, the company has 4600000 TL of yearly administrative costs regardless of the price or the
number of units sold, including the rents, depreciation of the buildings and other related assets and salaries of
58 workers (average monthly salary for white-collar and blue-collar workers are 5,000TL and 3,500 TL
respectively). Additionally, approximately 139 TL cost per each packet of tea produced and sold (Assume that
the total production is equal to total sales for the sake of simplicity).
What is the optimal revenue?
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