6. A small company manufactures a certain product. Variable costs are $20 per unit and fixed costs are $5,000. The price-demand relationship for this product is P = -0.2D + 220, where P is the unit sales price of the product and D is the annual demand. Find the breakeven quantity. Total cost = Fixed cost + Variable cost Revenue = Demand x Price Profit = Revenue - Total cost

6. A small company manufactures a certain product. Variable costs are $20 per unit and fixed costs are $5,000. The price-demand relationship for this product is P = -0.2D + 220, where P is the unit sales price of the product and D is the annual demand. Find the breakeven quantity. Total cost = Fixed cost + Variable cost Revenue = Demand x Price Profit = Revenue - Total cost

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Output (unit) Total cost (RM) Total fixed cost (RM) Total variable cost (RM) Average fixed cost (RM) Average variable cost (RM) Average total cost (RM) Marginal cost (RM) 0 600 600 - - - - - 10 1050 600 450 60 45 105 45 20 1450 600 850 30 42.5 72.5 40 30 1800 600 1200 20 40 60 35 40 2100 600 1500 15 37.5 52.5 30 50 2450 600 1850 12 37 49 350 60 2850 600 2250 10 37.5 47.5 40 70 3300 600 2700 8.57 38.57 47.14 45 80 3850 600 3250 7.5 40.625 48.125 55 90 4500 600 3900 6.67 43.34 50 65 100 5250 600 4650 6 46.5 52.5 75 Which time period is the firm operating? Why?
The variable cost for the small business is shown below. What is the marginal cost and average cost at a volume of 14 units? Cost $8000 $6000 $4000 $2000 $200/unit Volume marginal cost: $200/unit, average cost: $476/unit O marginal cost: $200/unit, average cost: $300/unit O None of them marginal cost: $300/unit, average cost: $800/unit $300/unit 10 Total cost Variable cost Fixed cost 15
Q1. Which cost increases continuously with the increase in production? (a) Average cost. (b) Marginal cost. (c) Fixed cost. (d) Variable cost.
Ace Shoe Company sells heel replacement kits for men's shoes. It has fixed costs of $6 million and unit variable costs of $5 per pair. If the company charges $15 per pair, how many pairs must it sell to break even? Ace Shoe Company sells heel replacement kits for men's shoes. It has fixed costs of $6 million and unit variable costs of $5 per pair. Ace would like to earn a profit of $2 million; how many pairs must they sell at a price of $15? Ace Shoe Company sells heel replacement kits for men's shoes. It has fixed costs of $6 million and unit variable costs of $5 per pair. Suppose a consultant tells Ace it can sell 700,000 heel repair kits, what price must it charge to achieve a profit of $2.5 million?
A small business produces and sells balls. The fixed costs are $20 and each ball costs $2.92 to produce. Each ball sells for $7.92. Write the equations for the total cost, C, and the revenue, R, then use the graphing method to determine how many balls must be sold to break even.
Cost, revenue, and profit are in dollars and x is the number of units. Suppose that the marginal revenue for a product is MR = 1800 and the marginal cost is MC = 90Vx + 4, with a fixed cost of $600. (a) Find the profit or loss from the production and sale of 5 units. There is a -Select-- | of $ (b) How many units will result in a maximum profit? units
The table below shows the monthly cost of producing vintage model cars for collectors. Instructions: Enter your answers as a whole number. Fill in the missing values for total fixed cost, total variable cost, and total cost in the table below. Vintage Model Car Production Costs Output 0 100 200 300 400 Total Fixed Cost (dollars) $3,000 3000 3000 3000 3000 Total Variable Cost (dollars) 1,200 1,700 3,700 III Total Cost (dollars) $3,000 5,700
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2. Suppose you are given the following cost data for a product. q (units) C (dollars) 4693 4831 5001 405 420 440 (a) Use averaging to estimate MC(120) (give units of yOur answer). (b) If the revenue (in dollars) from sclling q units is R= 13.78q. estimate the effect on profit of producing and selling the 421st unit. %3D
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At what output level is variable costs per unit at a minimum? Supporting Materials Steel Costs $ per ton MC ATC $175 AVC $115 $70 4,000 9,000 11,000 16,500 Steel Outp ut (in tons)