The demand function of "İsot Capsicum Biber Komandit Şirketi" of Ceylanpınar is: p = 1000 e 2 q where "p" is price in TL/kg and “q" is quantity sold in kg/min. Mr. Davut Tenorses, who is the COO of this company informs you that they export to hundreds of countries around the world and that they are operating 3 shifts a day for 30 days/month at maximum profit and wants you to find the cost function of his company in TL/month.

The demand function of "İsot Capsicum Biber Komandit Şirketi" of Ceylanpınar is: p = 1000 e 2 q where "p" is price in TL/kg and “q" is quantity sold in kg/min. Mr. Davut Tenorses, who is the COO of this company informs you that they export to hundreds of countries around the world and that they are operating 3 shifts a day for 30 days/month at maximum profit and wants you to find the cost function of his company in TL/month.

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

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 1E: The Potomac Range Corporation manufactures a line of microwave ovens costing $500 each. Its sales...

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The Potomac Range Corporation manufactures a line of microwave ovens costing $500 each. Its sales have averaged about 6,000 units per month during the past year. In August, Potomacs closest competitor, Spring City Stove Works, cut its price for a closely competitive model from $600 to $450. Potomac noticed that its sales volume declined to 4,500 units per month after Spring City announced its price cut. What is the arc cross elasticity of demand between Potomacs oven and the competitive Spring City model? Would you say that these two firms are very dose competitors? What other factors could have influenced the observed relationship? If Potomac knows that the arc price elasticity of demand for its ovens is 3.0, what price would Potomac have to charge to sell the same number of units it did before the Spring City price cut?
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