Management has at its disposal the following information: Demand (price) function: P =32 –Q Total cost function: C(Q) = 200 +2Q. Using the above functions, determine the following: a. Profit maximizing output (quantity) b. Profit-maximizing price c. Maximum profit value d. Revenue-maximizing output. (quantity)

Management has at its disposal the following information: Demand (price) function: P =32 –Q Total cost function: C(Q) = 200 +2Q. Using the above functions, determine the following: a. Profit maximizing output (quantity) b. Profit-maximizing price c. Maximum profit value d. Revenue-maximizing output. (quantity)

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

ChapterB: Differential Calculus Techniques In Management

Section: Chapter Questions

Problem 5E

See similar textbooks

Similar questions

Management has at its disposal the following information: Demand (price) function: P =423– 4.5Q Total cost function: C(Q) = 220+90Q. Using the above functions, the profit-maximizing quantity is (..............) units. (write only the number) Answer:
If total revenue rises by 20% when the price increases by 5%, this means:. Single choice. (1 Point) demand is price inelastic demand is price elastic demand is unit elastic demand is perfectly inelastic 1717, Implicit costs are:. Single choice. (1 Point) equal to total fixed costs. comprised entirely of variable costs. "payments" for self-employed resources. always greater in the short run than in the long run. 1818, With fixed costs of $400, a firm has average total costs of $3 and average variable costs of $2.50. Its output is:. Single choice. (1 Point) 200 units. 400 units. 800 units. 1,600 units. 1919, When firms advertise their product, they are trying to:. Single choice. (1 Point) Shift the demand curve to the right Make the demand curve steeper Make demand for the product more inelastic All of the above
Q: determine whether the following statements are true or false: a) Average fixed costs increase when the total volume of the produced goods increases. b) If the market price is constant, the increase in output will not affect the size of the firm's profit.
(i) If the demand function for a particular commodity is p=−0.09x+51 and the total cost function C(x)=1.32x2+11.7x+101.4,where x is the level of production. Find (a) The revenue R(x) and profit Π(x). (b) All values of x for which production of the commodity is profitable. (ii) The total cost of manufacturing x units during the daily production run at a factory,is C(x)= x2+ x+900 dollars. Usually,x(t)=25t units are manufactured during the first t hours of production. (a) Express the total manufacturing cost as a function of t. (b) How much will have been spent on production by the end of the third hour? (c) When will the total manufacturing cost reach $11,000?
Question 5 Read Optimize DTC Profits and Full Cost. Discuss how the concepts of price elasticity of demand and production costs can help firms set their selling prices.
The marketing research department for a company that manufacturers and sells gaming systems established the following price-demand function p(x)=240-30x Where p(x) is the wholesale price in dollars at which x thousand gaming systems can be sold, Find the revenue function when x thousand units are demanded Find the value of x that will produce maximum revenue. What is maximum revenue to the nearest thousand dollars? What is the price per gaming system that produces the maximum revenue?
1. If profit is maximum at sales of 700 units, does the firm have no choice but to limit sales at this level? Explain your answer. 2. A business firm produces and sells a particular Variable cost is P30/unit. Selling price is P40 per unit. Fixed cost is P60,000. a. What is the break-even quantity and break-even point? Show your solution. 3. A manager makes the statement that output should be expanded as long as average revenue exceeds average Does this strategy make sense? Explain. 4. Suppose that the steel firm’s costs are shown below: Complete the table and determine the optimal output to be Price of steel P17 per unit. Output (Q) TFC TVC TC MC TR MR Profit/Loss 0 500 0 1 500 50 2 500 90 3 500 140 4 500 200 5 500 270 6 500 350 7 500 450…
Royersford Knitting Mills, Ltd. sells a line of women’s knit underwear. The firm now sells about 20,000 pairs a year at an average price of $10 each. Fixed costs $60,000, and total variable costs equal $120,000. The production department has estimated that a 10 percent increase in output would not affect fixed costs but would reduce average variable cost by 40 cents. The marketing department advocates a price reduction of 5 percent to increase sales, total revenues, and profits. The arc elasticity of demand is estimated at -2. Evaluate the impact of the proposal to cut prices on (1) total revenue, (2) total cost, and (3) total profits. If average variable costs are assumed to remain constant over a 10 percent increase in output, evaluate the effects of the proposed price cut on total profits.
has established that the relationship between the price for one of its products is approximately. In addition there is a fixed cost of $45,000 per year and the variable cost to manufacture the product is $45 per unit. What level of demand maximizes the total revenue? Ans. is Blank 1. What level of demand maximizes the total profit for this product? Ans. is Blank 2. Blank 1_____________ Blank 2_____________
THIS IS WRONG!!! THIS IS THE SAME SOLUTION PROVIDED AS BEFORE (EXACT COPY AND PASTE). PLEASE PROVIDE A CORRECT SOLUTION. THE CORRECT ANSWERS ARE: Long-run quantity = 39 Long-run intercept = 158 Long-run price = 119 Long-run profits = 0
Wyandotte Chemical Company sells various chemicals to the automobile industry. Wyandotte currently sells 30,000 gallons of polyol per year at an average price of $30 per gallon. Fixed costs of manufacturing polyol are $180,000 per year and total variable costs equal $360,000. The operations research department has estimated that a 15 percent increase in output would not affect fixed costs but would reduce average variable costs by 60 cents per gallon. The marketing department has estimated the arc elasticity of demand for polyol to be –2.0. How much would Wyandotte have to reduce the price of polyol to achieve a 15 percent increase in the quanity sold in percent? Such a price cut would increase or decrease total revenues from $900,000 to $ ? Total costs would be $ . and total profits would be $ ?
Consider the following price-demand function: P = 80 − 4Q, {Q/0 ≤ Q ≤ 10} (i) Sketch the price-demand function(ii) Find the revenue function.(iii) Suppose C = 20 + 5Q , find the profit function(iv) Calculate the profit if Q=8(v) Find the break-even level of output You have to solve iv and v