A flour mill buys its wheat from two different farms, then processes the wheat into flour. Wheat fromFarm X costs the mill $7 per bushel, and wheat from Farm Y costs the mill $15 per bushel.The selling price (in dollars per bushel) for the mill's wheat can be modeled by p(x, y) =500 x y where x is the demand for the flour milled from Farm X's wheat and y is the demandfor flour milled from Farm Y's wheat. Assume that x and y may be zero (so the mill only buys fromone of the suppliers) and that the mill can by 1/2 of a bushel.Then the maximum profit is attained whenx =y =bushelsbushelsThe amount of the flour mill's maximum profit is $

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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BigSwaba Corp produces virus home test kits which it sells in the market. It pays a marketing company to post Instagram images of people using the kits in the comfort of their own homes. The demand for the kits and cost of production are as follows: 1 1 Cost: C=200+=q´ +m 1/2 Demand: p=48+m/: Where m is the firm's marketing expenditure. Assume the CEO of BigSwaba asks you to help the company maximize profit. а. How many kits should the company sell and at what price? b. What is the demand elasticity at this output level? C. What should their marketing budget be? Assume the CEO of BigSwaba realizes her bonus will determined not by profits, but by the firm's revenue. Maintaining the same marketing budget as in part a: d. What quantity should the firm produce to maximize revenue?
The demand and supply functions for a particular commodity are D(x) = 80e-0.001x and S(x)= 30e0.001r , where x is the number of units of the product, D(x) is the price that results in a consumer demand of x units and S(x) is the price that results in a producer supply of x units. a. Find the equilibrium point using your calculator and identify the equilibrium units and price. Give your answers to the nearest whole unit and nearest dollar. The value of x at equilibrium is units. The value of p at equilibrium is b. Determine the consumers' surplus.
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Based on Zangwill (1992). Murray Manufacturing runs a day shift and a night shift. Regardless of the number of units produced, the only production cost during a shift is a setup cost. It costs $8000 to run the day shift and $4500 to run the night shift. Demand for the next two days is as follows: day 1, 2000; night 1, 3000; day 2, 2000; night 2, 3000. It costs $1 per unit to hold a unit in inventory for a shift. a. Determine a production schedule that minimizes the sum of setup and inventory costs. All demand must be met on time. (Note: Not all shifts have to be run.) b. After listening to a seminar on the virtues of the Japanese theory of production, Murray has cut the setup cost of its day shift to $1000 per shift and the setup cost of its night shift to $3500 per shift. Now determine a production schedule that minimizes the sum of setup and inventory costs. All demand must be met on time. Show that the decrease in setup costs has actually raised the average inventory level. Is this…
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Exercise 5.4 A company is producing and selling branded milk with the following total cost function: CT(q)= 0.2q²+q+70. If the demand function for this brand of milk is: P=15-0.5q: a) Calculate the optimal price of milk, as well as the optimal quantity sold and the profits of the company. b) Calculate the price elasticity of demand in the equilibrium of the company. c) Justify why the company has an excess of productive capacity. d) Represent graphically.
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please answer it using handwriting to understand it
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Green et al. (2005) estimate the supply and demand curves for California processed tomatoes. The supply function is: In(Q) = 0.200 + 0.550 In(p). where Q is the quantity of processing tomatoes in millions of tons per year and p is the price in dollars per ton. The demand function is: In(Qa) = 2.600 - 0.200 In(p) + 0.150 In(p;). where p, is the price of tomato paste (which is what processing tomatoes are used to produce) in dollars per ton. Suppose pt = $109. Determine how the equilibrium price and quantity of processing tomatoes change if the price of tomato paste falls by 7%. If the price of tomato paste falls by 7%, then the equilibrium price will by S . (Enter a numeric response using a real number rounded to two decimal places.)

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