Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 7, Problem 49P
If a monopolist produces q units, she can charge 400 – 4q dollars per unit. The variable cost is $60 per unit.
- a. How can the monopolist maximize her profit?
- b. If the monopolist must pay a sales tax of 5% of the selling price per unit, will she increase or decrease production (relative to the situation with no sales tax)?
- c. Continuing part b, use SolverTable to see how a change in the sales tax affects the optimal solution. Let the sales tax vary from 0% to 8% in increments of 0.5%.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A manufacturing company has the following financial information (in millions of $)Sales $562Cost of goods soldDirect labor 43Purchased materials 267Overhead 35All other costs 142Pretax earnings 75a. What is the profit leverage effect of purchasing in this company?b. What is the percent increase in earnings from a 5 percent savings in purchasing?
You are the owner of Caché, a chain of women's clothing boutiques. Your state has a sales tax of 7%, and your city has an additional sales tax of 1.5%. Each quarter you are responsible for making these tax deposits to the city and state. Last quarter your stores had total revenue, including sales tax, of $488,250.
a) How much of this revenue was sales (in $) and how much was sales tax (in $)?
sales
sales tax
b) How much sales tax (in $) should be sent to the city?
c)How much sales tax (in $) should be sent to the state?
4.1REQUIREDStudy the information given below and calculate the following if the sales manager’s proposal is accepted:4.1.1 Break-even quantity.4.1.2 The number of units that must be sold to achieve the company’s profit objective.
INFORMATIONSirloin Enterprises manufactures a product that sells for R9 each. The company presently produces and sells 90 000 units per year. Total variable manufacturing costs and selling costs are R405 000 and R81 000 (10% of sales) respectively. Fixed costs are R226 440 for manufacturing overheads and R97 200 for selling and administrative activities.The sales manager has proposed that the price be increased to R10.80 per unit. The company’s profit objective is 10% of sales.
4.2 ENO Ltd, a pharmaceutical company, is seeking finance for the development of a vaccine aimed at reducing the spread the Corona virus. The company is seeking funding only from the public in the form of equity as well as long-term borrowing.In light of the above, critically discuss…
Chapter 7 Solutions
Practical Management Science
Ch. 7.3 - Prob. 1PCh. 7.3 - Prob. 2PCh. 7.3 - Pricing Decisions at Madison The Madison Company...Ch. 7.3 - Prob. 4PCh. 7.3 - Prob. 5PCh. 7.3 - Prob. 6PCh. 7.3 - Prob. 7PCh. 7.3 - Prob. 8PCh. 7.3 - Prob. 9PCh. 7.3 - Prob. 10P
Ch. 7.3 - Prob. 11PCh. 7.3 - Prob. 12PCh. 7.3 - Prob. 13PCh. 7.3 - PRICING SUITS AT SULLIVANS Sullivans is a retailer...Ch. 7.3 - Prob. 15PCh. 7.4 - Prob. 16PCh. 7.4 - Prob. 17PCh. 7.4 - Prob. 18PCh. 7.4 - Prob. 19PCh. 7.4 - Prob. 20PCh. 7.4 - Prob. 21PCh. 7.4 - Prob. 22PCh. 7.4 - Prob. 23PCh. 7.5 - Prob. 24PCh. 7.5 - Prob. 25PCh. 7.5 - Prob. 26PCh. 7.5 - Prob. 27PCh. 7.6 - Prob. 28PCh. 7.6 - Prob. 29PCh. 7.6 - Prob. 30PCh. 7.6 - Prob. 31PCh. 7.6 - Prob. 32PCh. 7.6 - Prob. 33PCh. 7.6 - The method for rating teams in Example 7.8 is...Ch. 7.7 - Prob. 35PCh. 7.7 - Prob. 36PCh. 7.7 - Prob. 37PCh. 7.7 - The stocks in Example 7.9 are all positively...Ch. 7.7 - Prob. 39PCh. 7.7 - Prob. 40PCh. 7.7 - Prob. 41PCh. 7.7 - Prob. 42PCh. 7.8 - Given the data in the file Stock Beta.xlsx,...Ch. 7.8 - Prob. 44PCh. 7 - Prob. 45PCh. 7 - Prob. 46PCh. 7 - Another way to derive a demand function is to...Ch. 7 - Prob. 48PCh. 7 - If a monopolist produces q units, she can charge...Ch. 7 - Prob. 50PCh. 7 - Prob. 51PCh. 7 - Prob. 52PCh. 7 - Prob. 53PCh. 7 - Prob. 54PCh. 7 - Prob. 55PCh. 7 - Prob. 56PCh. 7 - A beer company has divided Bloomington into two...Ch. 7 - Prob. 58PCh. 7 - Prob. 59PCh. 7 - Prob. 60PCh. 7 - Prob. 61PCh. 7 - Prob. 62PCh. 7 - Prob. 63PCh. 7 - You have 50,000 to invest in three stocks. Let Ri...Ch. 7 - Prob. 65PCh. 7 - Prob. 66PCh. 7 - Prob. 67PCh. 7 - Prob. 68PCh. 7 - Prob. 69PCh. 7 - Prob. 70PCh. 7 - Based on Grossman and Hart (1983). A salesperson...Ch. 7 - Prob. 73PCh. 7 - Prob. 74PCh. 7 - Prob. 75PCh. 7 - Prob. 76PCh. 7 - Prob. 77PCh. 7 - Prob. 78PCh. 7 - Prob. 79PCh. 7 - Prob. 80PCh. 7 - Prob. 81PCh. 7 - Prob. 82PCh. 7 - Prob. 83PCh. 7 - Prob. 84PCh. 7 - Prob. 85PCh. 7 - Prob. 86PCh. 7 - Prob. 1.1CCh. 7 - Prob. 1.2CCh. 7 - Prob. 1.3CCh. 7 - Prob. 1.4C
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- A. Write a document with the following information: 1. What do you expect your job to pay when you start? 2. What benefits are musts for you? 3. What benefits would you like to have even though they are not musts? 4. Include the graph you generate in step B below. B. Create a spreadsheet and a graph of life vs funds For each year of your remaining life specify the amount you plan to save/invest/withdraw that year and how much you expect that amount to increase during the year (base on actual data – typical savings interest rate, typical stock market interest rate, typical CDs, typical…). Calculate how much your funds will increase/decrease over your life and create a life (x-axis) vs funds (y-axis) plot.arrow_forward1) Which of the following translates business plan into productionplanningAPPMPSMRPNone of the Above2) Master production schedule is a medium-range planning and it isused for quantity and timing ofcomponents and raw materialFinished goodsBoth A & B3) The manufacturing strategy which deploys hiring and laying ofworkers in order to match its production rate to demand is calledLevel Production StrategyChase Production StartegyHybrid StrategyNone of the above4) "In a level production strategy, if the firm makes annual 120,00units per annum, the permonth production can be estimatted by""120,00 /12""120,00 / 365"The information is not complete5) The Bill of material is an engineering documments that showsinclusive listing and sub-components to be used for end productTRUEFALSE6) A lead capacity usually increases or decreases its capacity in anticipation of demand, this is known as "Match strategyLead Capacity StrategyLag capacity strategy7) The most important output of MRP isBOMPlanned…arrow_forwardLouis Clark, the new administrator for the surgical clinic, was trying to figure out how to allocate his indirect expenses. His staff was complaining that the current method of taking a percentage of revenues was unfair. He decided to try to allocate utilities expense based on square footage for each department, to allocate administration expense based on direct costs, and to allocate laboratory expense based on direct costs, and to allocate laboratory expense based on tests. What would the results be?arrow_forward
- 2. Analyze the situation and answer the following questions. Ed and Barbara Bonneau started their wholesale sunglass distribution firm 30 years ago with $1,000 of their own money and $5,000 borrowed from a country banker in Ed’s hometown. The firm grew quickly, selling sunglasses and reading glasses to such companies as Wal-Mart, Eckerd Drugs, and Phar-Mor. In addition, the Bonneaus enjoyed using the company to do good things. For example, they had a company chaplain, who was available when employees were having family problems, such as a death in the family.Although the company had done well, the market had matured recently and profit margins narrowed significantly. Wal-Mart, for example, was insisting on better terms, which meant significantly lower profits for the Bonneaus. Previously, Ed had set the prices that he needed to make a good return on his investment. Now, the buyers had consolidated, and they had the power. Ed didn’t enjoy running the company as much as he had in the…arrow_forwardA goldsmith makes two types of jewelry. A model A ring is made with 1 g of gold and 1.5 g of silver and sells for 25 UM.Another model B ring sells for 30 UM and is made of 1.5 g of gold and 1 g of silver. If you only have 750 gof each metal, how many rings should be made of each type to obtain maximum profit?Requested:- Make Initial Table of the problem.- Obtain the Case Variables- Obtain the Objective Function- Get Restrictions- Create the Simplex Table- Obtain the Optimal Solution and the Slack Variables.Solve this operational research exercise.arrow_forwardYou have an idea for a new web service that offers customized workouts for subscribers. Build a spreadsheet to calculate 1) the number of new customers each month and 2) the total customer base (cumulative number of customers signed up) each month. Mimic what we did in the class to project the subscription volumes for 60 months under the following sets of assumptions. a)Total market potential is 1,000,000 customers. Each month, you sign up 2% of customers in the market that have not yet signed up. b)Total market potential is initially 1,000,000 customers, but grows at 1% per month. Each month, you sign up 2% of customers in the market that have not yet signed up. Use the graph wizard to make a graph comparing total customer base under each of the two scenarios. Which type of graph is appropriate?arrow_forward
- West Company’s contribution format income statement for March 2020 is givenbelow:Sales (15,000 units X $30 per unit) $450,000Variable expenses 315,000Contribution margin 135,000Fixed expenses 90,000Net operating income $ 45,000The industry in which West Company operates is quite sensitive to regularmovements in the economy. Thus, profits vary considerably from year to yearaccording to general economic conditions. The company has a large amount ofunused capacity and is studying ways of improving profits.Required:The company CEO has asked you as a Senior Manager to evaluate the belowsituations with recommendations:1- New equipment has come onto the market that would allow WestCompany to automate a portion of its operations. Variable expenseswould be reduced by $9 per unit. However, fixed expenses wouldincrease to a total of $225,000 each month. How Net Income wouldappear if the new equipment were purchased. As a Senior Manager,what factor/s would be paramount in your mind deciding…arrow_forwardHarrison Hotels is considering adding a spa to its currentfacility in order to improve the list of amenities. Operating thespa would require a fi xed cost of $25,000 per year. Variable costis estimated at $35 per customer. Th e hotel wants to break even if12,000 customers use the spa facility.(a) Construct a spreadsheet model, assuming that sellingprice is an input to be specifi ed by the user.(b) Use Goal Seek to fi nd the selling price for which the hotelwill break evenarrow_forward26 - Which of the following is false regarding the methods used in the business valuation process? a) Analytical job valuation methods are scoring and factor comparison. B) There is no exact way to determine the contribution of each job in the enterprise to the efficiency of the enterprise. NS) The least used valuation method is scoring. D) Non-analytical methods are sorting and classification methods. TO) It is divided into analytical and non-analytical methods.arrow_forward
- For a table manufacturing company, selling price for a table is $183.00 per Unit, Variable cost is $25.00 per Unit, rent is $3,380.00 per month and insurance is $296.00 per month. Company wants to expand its business and improve the table quality, it wants to increase the selling price for a table to $254.00 per Unit, Variable cost to $43.00 per Unit, bigger area will have rent $5,235.00 per month and insurance is $362.00 per month At what point will the company be indifferent between the current mode of operation and the new option?arrow_forwardRollo Megabux has $1 million to invest in stocks orbonds. The percentage yield on each investment during thecoming year depends on whether the economy has a goodor a bad year (see Table 17). It is equally likely that theeconomy will have a good or a bad year.a If Rollo is risk-neutral, how should he invest hismoney?b For $10,000, Rollo can hire a consulting firm toforecast the state of the economy. The consulting firm’sforecasts have the following properties:P(good forecast|economy good) .80P(good forecast|economy bad) .20Should Rollo hire the consulting firm? What are EVSIand EVPI? Economy EconomyHas Good Has BadYear YearYield on stocks 22% 10%Yield on bonds 16% 14%arrow_forwardPlease answer A-C with the most true answer. A. Which of the following is most closely associated with return on assets? a. The cost of equity b. The proportion of debt and equity in the company’s capital structure c. The prime lending rate d. The average operating assets of the company B. Which of the following is most closely associated with expenses? a. Product (value propositions) design(s) b. Average operating assets c. Proportion of debt and equity in the company’s capital structure d. Equity risk premium C. Which of the following is most closely associated with the cost of debt? a. Non-operating expenses b. Risks specific to the company c. The long-term bond yield d. Prime lending ratearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Introduction to Forecasting; Author: Ekeeda;https://www.youtube.com/watch?v=5eIbVXrJL7k;License: Standard YouTube License, CC-BY