10 Mark is opening an ice cream stand. Hebelieves the fixed cost per week of runningthe stand is $50.00. His best guess is that hecan sell 300 cones per week at $0.50 percone. The variable cost of producing a coneof ice cream is $0.20.A- while using goal seek, given his otherassumptions, what level of sales volume willenable him to break even?B- while using a one way data table given hisother assumptions, discuss how a change insales volume affects profit.c- while using a two way data table, given hisother assumptions, discuss how a change insales volume and variable cost jointly affectprofit.d- use excels formula auditing tools to showwhich cells in your spread sheet affect profitdirectly.

All the information is provided in the following table and formula used are as follows : Fixed Cost…

Answered: Mark is opening an ice cream stand. He…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.6IP

See similar textbooks

Similar questions

In choosing a production technology, how will firms react if one input becomes relatively more expensive?
A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.
Requireda. How much is the fixed cost to produce the natural-organic oil? b. How many barrels of natural-organic oil should the firm produce to maximize its profit? c. How much is the price of the natural-organic oil per barrel? d. At what production level would the marginal cost exceed the average cost? e.bHow many barrels of natural-organic oil reflect the lowest minimum average variable cost?
Karen runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1 per poster. She has fixed costs of $250. Her variable costs are $1,800 for the first thousand posters, $1,500 for the second thousand, and then $900 for each additional thousand posters. a. What is her AFC per poster (not per thousand!) if she prints 1,000 posters? What if she prints 2,000 posters? What if she prints 10,000 posters? b. What is her ATC per poster if she prints 1,000? What if she prints 2,000? What if she prints 10,000? c. If the market price fell to 85 cents per poster, would there be any output level at which Karen would not shut down production immediately? Yes/No
Yennefer produces spells. Suppose q is the quantity of spells produced. Her Total Costs are given byTC(g)=171+g^2 and her Marginal Costs are given by MC(g)=2q. What is her minimum AverageTotal Cost?
A. How much is the fixed cost to produce the natural-organic oil? B. How many barrels of natural-organic oil should the firm produce to maximize its profit? C. How much is the price of the natural-organic oil per barrel? D. At what production level would the marginal cost exceed the average cost? E. How many barrels of natural-organic oil reflect the lowest minimum average variable cost?
Problem 2: Average total cost, from “Principles of Economics” by N. Gregory MankiwYou are the chief financial officer for a firm that sells gaming consoles. Your firm has thefollowing average-total-cost schedule:Quantity | Average total cost600 $300601 $301Your current level of production is 600 consoles, all of which have been sold. Someone calls, desperateto buy one of your consoles. The caller offers you $550 for it. Should you accept the offer? Why or whynot?
Compare the average total cost and the marginal cost and explain the relationship Describe the methods that can be used to dertermine where profit is maximized L Q MP MC TC ATC 0 0 200 1 20 20 5.00 300 15 2 50 30 3.33 400 8 3 90 40 2.50 500 5.56 4 120 30 3.33 600 5.00 5 140 20 5.00 700 5.00 6 150 10 10.00 800 5.33 7 155 5 20.00 900 5.81
You are planning to setting up a Fruity Juice Stand. The stand itself costs IDR2,000,000,- The ingredients for each plastic glass of Fruity Juice costs IDR 5,000,- a. What is your fixed cost of doing business? What is your variable cost perplastic glass of fruity juice? b. Construct a table showing your total cost, average total cost, and marginalcost for output levels varying from 0 to10 gallons. (Hint: There are 16 plasticglass in a gallon) c. Draw the three cost curves!
Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) NOTE: the options for the blank question is this Suppose Ike's Bikes is expecting to produce 500 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using _______ (once factory OR two factory OR three factory)
What is relationship between total revenue (TR) and total variable cost (VC) if the price is between AVC and ATC (does TR covers part of VC, All VC or all VC and part of foxed cost)?
A firm is producing 20 units with an averagetotal cost of $25 and a marginal cost of $15. Ifit increases production to 21 units, which of thefollowing must occur?a. Marginal cost will decrease.b. Marginal cost will increase.c. Average total cost will decrease.d. Average total cost will increase.

SEE MORE QUESTIONS

Recommended textbooks for you

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Micro Economics For Today

Economics

ISBN:

9781337613064

Author:

Tucker, Irvin B.

Publisher:

Cengage,

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Micro Economics For Today

Economics

ISBN:

9781337613064

Author:

Tucker, Irvin B.

Publisher:

Cengage,

Survey Of Economics

Economics

ISBN:

9781337111522

Author:

Tucker, Irvin B.

Publisher:

Cengage,

Principles of Economics 2e

Economics

ISBN:

9781947172364

Author:

Steven A. Greenlaw; David Shapiro

Publisher:

OpenStax

Economics: Private and Public Choice (MindTap Cou…

Economics

ISBN:

9781305506725

Author:

James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS