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1) What economic conditions are relevant in managerial decision making?
2) What factors lead to competitive advantage for a firm?
3) What are the typical types of risk faced by a firm?
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- Use the table below to answer the following questions:QuantityDemand (Price)Marginal RevenueMarginal CostAverage Cost1$120012005005002110010002753883100080022533349006002503135800400400330670020050035876000700407 Are there consumers who want the product but are not willing to pay the profit-maximizing price the firm will charge? How can you tell?If the firm could charge every consumer exactly what that consumer was willing to pay (called perfect price discrimination), would the quantity the firm produced increase, decrease, or remain the same? Would the firm’s profits increase, decrease, or remain the same? Explain your answers.Suppose that the fish processor could use a different production method that involves recycling water. This would reduce the pollution in the lake to levels safe for recreation, and the boat tour would no longer be affected. If the fish processor uses the recycling method, then the fish processor's economic profit is $1,300 per week, and the boat tour's economic profit is $1,900 per week. If the fish processor does not use the recycling method, then the fish processor's economic profit is $1,600 per week, and the boat tour's economic profit is $1,100 per week. These figures are summarized in the following table. Complete the following table by computing the total profit (the fish processor's economic profit and the boat tour's economic profit combined) with and without recycling. Action Profit Fish Processor Boat Tour Total (Dollars) (Dollars) (Dollars) No Recycling 1,600 1,100 Recycling 1,300 1,900 Total economic profit is highest…The value of Marginal revenue is $40 and the value of marginal cost is $30. Is the firm maximizing profits True/False
- **Practice** Consider a profit-maximizing multinational pharmaceutical company that uses a rare plant to produce expensive drugs. That plant cannot be farmed; it only grows naturally in tropical forests of a poor country, and is hard to find. The company hires local inhabitants search for, and gather, these plants. The amount of plants found depends on worker effort but also luck (there may be no plants in the area they look; or they may be sick on some days andthus less effective at plant gathering, even if they search all day). It is very expensive for the firm to observe worker effort, as that would require hiring additional workers to monitor the plant gatherers, and these workers would have to be well-paid so that they couldn’t be easily bribed. Which of the following statements are correct?(I) If the multinational offers a fixed monthly compensation to the plant gatherers (that is, the same amount of money regardless of how many plants they deliver), that might generate a moral…Suppose that a local electrical utility firm was split into five firms of equal size. What do you expect about electricity prices? write you details.Figure: Costs of Oil Production. $50 30 15 Marginal Average Quantity (barrels of oil) Assuming that price equals marginal cost, the profit of producing 8 barrels of oil is: $240. It cannot be determined from the information given. $400 $160.
- The Orlando Magic is the National Basketball Association (NBA) professional basketball team that plays at the Amway Center in downtown Orlando. Which of the answer choices best describes a VARIABLE COST for the Orlando Magic? O The Magic's advertising expense for its "Go Magic!" television commercials. The Magic's 13-player roster, including guard Devin Cannady and center Mo Bamba. O The Magic's ticket price of $257 to sit in the Legends Seats. The rent that the Magic pays the City of Orlando for use of the Amway Center.At what output rate does the firm maximize profit or minimize loss?Not image upload answer please.
- A company manufactures Products A, B, and C. Each product is processed in three departments: I, II, and III. The total available labor-hours per week for Departments I, II, and III are 1020, 1080, and 900, respectively. The time requirements (in hours per unit) and the profit per unit for each product are as follows. Product A Product B Product C Dept. I 2 1 2 Dept. II 3 1 2 Dept. II 2 2 1 Profit $18 $12 $15 If management decides that the number of units of Product B manufactured must equal or exceed the number of units of products A and C manufactured, how many units of each product should the company produce to maximize its profit?Q5What would the answer be for 3 and 4?
