Exercise 3. Your software company recently instituted a highly regarded training programfor newly hired software developers. The benefits of this program include not only thebenefits to employees, but also the goodwill generated by an increase in your reputationamong customers and professional groups. The costs of this training program include allof the labor, space, and consultants necessary. Suppose these benefits and costs are givenby B(Q) = 100Q2Q² and C(Q) = 100, where Q represents the amount of hours eachsoftware developer should spend in training. (Note that MB = 100 – 4Q, MC = 10, andalso that time can be measured in fractions of one hour.)a. What level of Q maximizes the total benefits of your newly introduced training pro-gram?b. What level of Q minimizes the total costs of the program?c. What level of Q maximizes the net benefits?d. What level of training is optimal? Why?

*Answer: . Given, Total benefit: B (Q) = 100Q -2Q^2 Total cost: C (Q) = 10Q Marginal benefit = dB…

ware developers. The benefits of this program 5, but also the goodwill generated by an increa d professional groups. The costs of this trainin and consultants necessary. Suppose these benefit 20² and C(Q) 10Q, where Q represents the ould spend in training. (Note that MB = 100 measured in fractions of one hour.) Q maximizes the total benefits of your newly int minimizes the total costs of the program? maximizes the net benefits? caining is optimal? Why?

ware developers. The benefits of this program 5, but also the goodwill generated by an increa d professional groups. The costs of this trainin and consultants necessary. Suppose these benefit 20² and C(Q) 10Q, where Q represents the ould spend in training. (Note that MB = 100 measured in fractions of one hour.) Q maximizes the total benefits of your newly int minimizes the total costs of the program? maximizes the net benefits? caining is optimal? Why?

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

Chapter7: Economies Of Scale And Scope

Section: Chapter Questions

Problem 7.5IP

See similar textbooks

Similar questions

The Almost-Graduating Senior Problem. Consider this situationfaced by a first-semester senior in civil engineering who is exhaustedfrom extensive job interviewing and penniless from excessivepartying. Mary’s impulse is to accept immediately a highly attractivejob offer to work in her brother ’s successful manufacturing company.She would then be able to relax for a year or two, save some money,and then return to college to complete her senior year and graduate.Mary is cautious about this impulsive desire, because it may lead tono college degree at al a. Develop at least two formulations for Mary’s problem.b. Identify feasible solutions for each problem formulation in Part (a).Be creative!
Suppose the total benefit derived from a given decision, Q, is B(Q) = 20Q – 2Q2 and the corresponding total cost is C(Q) = 4 + 2Q2.Instructions: Use a negative sign (-) where appropriate and round up your answers to no decimal. Do not round values if needed to complete other calculations.a. What is total benefit when Q = 2? Q = 10?When Q = 2: $ When Q = 10: $ b. What is marginal benefit when Q = 2? Q = 10?When Q = 2: $ When Q = 10: $ c. What level of Q maximizes total benefit? Q = units. d. What is marginal cost when Q = 2? Q = 10?When Q = 2: $ When Q = 10: $ e. What level of Q maximizes net benefits? Q =
3.2 Differentiate between accounting costs and economic costs. Motivate your answer with the aid of examples
[A] Suppose that a drug company has developed an ointment that can be used to treat sores and reduce scarring. Surveys indicated that the ointment, which costs $10,000 for a full course of treatment, can improve the quality of life from 0.6 to 0.7 for patients with this problem. Assume that this population has a life expectancy of 70 years. No need to worry about discounting. 1. What is the Incremental Cost-Utility Ratio (ICUR) for taking the ointment over doing nothing for a typical 20-year-old patient? [Hint: This patient has only 50 years of life remaining.] 2. If the cost-effectiveness threshold is $5,000 per QALYS, will the 20-year-old patient choose to get the ointment? What about a 60-year-old patient? [B] Is it appropriate to evaluate a healthcare intervention using various methods of economic evaluation as discussed in this course, or should we choose one primary method that best fits the analysis?
Electrical Components Profit A company’s dailyprofit from the production and sale of electrical components can be described by the equation P(x) =6.45x - 2000 dollars, where x is the number of unitsproduced and sold. What level of production andsales will give a daily profit of more than $10,900?
A company estimated that the relationship between the unit price and demand per month for a potential new product is approximated by P = $ 100 – $ 0.1D. The company can produce the product by increasing fixed costs $ 17,500 per month, and the estimated variable costs is $ 40 per unit. What is the optimal demand, D*, and based on this demand, should the company produce new product? Why? a) Work out the complete solution by differential calculus, starting with formula for profit or loss per month b) Solve graphically for an approximate answer
Q7: Please show exact detailed steps for each problem
Problem 1. During your first month as an employee at Greenfield Industries (a large drill-bitmanufacturer), you are asked to evaluate alternatives for producing a newly designed drill bit on aturning machine. Your boss’ memorandum to you has practically no information about what thealternatives are and what criteria should be used. The same task was posed to a previous employeewho could not finish the analysis, but she has given you the following information: An old turningmachine valued at $350,000 exists (in the warehouse) that can be modified for the new drill bit.The in-house technicians have given an estimate of $40,000 to modify this machine, and they assureyou that they will have the machine ready before the projected start date (although they havenever done any modifications of this type). It is hoped that the old turning machine will be able tomeet production requirements at full capacity. An outside company, McDonald Inc., made themachine seven years ago and can easily do the…
5. An entrepreneur has costs for storing and shipping materials for his manufacturing process given by the function C (k) = 100 (100 + 9k + 144 / k) when 1 ≤ k ≤ 100, where C (k) is the cost total storage and transportation for 100 days of operation. If a load of k tons of material moves every k days, for what values of k does C (k) have a minimum value?
A local company is planning to manufacture and market a four-slice toaster. For this toaster, the research department’s estimates are aweekly demand of 300 toasters at a price of $25 per toaster and a weekly demand of 400 toasters at a price of $20. The financial department’s estimates are fixed weekly costs of$5,000 and variable costs of $5 per toaster. a) Assume that the relationship between price ? and demand ? is linear. Use the research department’s estimates to express ? as a function of ? and determine the domain of the function. b) Using your knowledge from Finite Math, determine the Revenue function in terms of ?. c) Determine the Marginal Revenue at 2 different production levels for example 250 and 500 units. Interpret these results. (HINT: Consider what a positive or negative first derivative implies) d) Assume that the cost function is linear. Use the financial department’s estimates to express the cost function interms of ?. e) Determinethe Marginal costand interpret the…
Decide the best choice. a. The inndividual waiting times experienced by customers in a busy breakfast cafe would be an example of a deterministic process because several customers are waiting to be seated. b. Informmation Systems and Informmation Technology are identical and synonyms that mean the exact same thing. c. In 2019, both manuffacturing and service sectors employed roughly the same percentage of the labor force in USA. d. Today, services constitute a large percentage (e.g., more than 60%) of the U.S. economy. e. Both choices ‘a’ and ‘b’ are correct.
Answer the following question with (True) if the statement is correct and with(False) if the statement is wrong 1. Project is a temporary endeavor undertaken to create a unique product only ( __ )Justify:2. Time, budget, resources and customer specifications are the project limitations( __ )Justify:3. Adding working shifts to a late project will help crashing the project towards thedeadline( __ )Justify:4. Finish-to-start (FS) is a logical relationship in which a predecessor activity cannot startuntil a successor activity has finished. ( __ )Justify:5. The project customer/user not considered as a project stakeholder. ( __ )Justify: