After implementing activity-based costing to estimate customer-level technical support costs, ABC Company found that customer A is profitable and customer B is unprofitable. What are reasonable ways to deal with customer B? (select ALL correct answers) charge customer B a higher price per unit (assume that you can charge different customers different prices for the same product or service)

After implementing activity-based costing to estimate customer-level technical support costs, ABC Company found that customer A is profitable and customer B is unprofitable. What are reasonable ways to deal with customer B? (select ALL correct answers) charge customer B a higher price per unit (assume that you can charge different customers different prices for the same product or service)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q3
Practice Sheet: Market Structure The objective of this sheet is to show you how prices and quantities are determined for each market structure and competition styles. It will also allow you to compare different market outcomes The demand for cookies is given by Q=120-P, where Q is the number of boxes of cookies. Assume a constant unit cost of $10, i.e. ATC=MC-$10. You may use the table below to help you understand the steps, but you don't have to. Price 0 10 20 30 40 50 60 70 80 90 100 110 120 Quantity Profit Perfect Competitive market: Assume the market was perfectly competitive. a. The long run equilibrium P=....... and Q=.. b. Industry profit=...
Consider a computer hardware production firm with total cost function TC = 2200+480Q+20Q2, and market demand function Qd = 190 – 2P; Q is output and P is market price. (a) Determine the firm’s Total Cost when it produces 120 units of output. (b) Determine the firm’s Marginal Cost when it produces 120 units of output. (c) Determine the firm’s Average Cost when it produces 120 units of output. (d) Find the market price of the firm’s output when it sells 120 units of output. (e) Determine whether the firm makes profit, or loss, at 120 units of output.
Country Motorbikes Incorporated finds that it costs $400 to produce each motorbike, and that fixed costs are $1300 per day. The price function is p(x)= 700-5x, where p the price (in dollars) at which exactly x motorbikes will be sold. Find the quantity Country Motorbikes should produce and the price it should charge to maximize profit. Also find the maximum profit. 40 quantity price profit motorbikes Enter a number.
Joe decided to quit his computer-programming job (where he was earning $48,000 per year) to start his own software business. For his office, Joe will use a two-story building that he bought 7 years ago for $250,000. The building is located in Hyde Park (South side of Chicago) in an area where a lot of recent construction has taken place, so the market price for the land has increased. You are given the following information about the costs of his firm: Joe will pay himself a wage of: Maintenance and insurance Revenue Land's salvage (resale) value Risk-free interest rate $18,000 per year $30,240 per year $96,000 per year $395,000 4.75% annually Assume for simplicity that all taxes are equal to zero. Calculate the economicannual profits of this firm (you can assume that investing the money at the risk-free rate is its best alternative use).
Question 4
The Lead Zeppelin Company produces powered and steerable lighter-than-air craft. The company’s airships are specially lined and are therefore safer than normal dirigibles. The table below shows the weekly production of dirigibles, along with the associated Average Cost and Total Revenue figures (the Average Cost and Total Revenue figures are actually in thousands of dollars, so the $15 represents $15,000, but we have left off the zeros to save space). Quantity Average Cost Total Cost Total Revenue 0 -- 0 $0 1 $15 15 $10 2 $9 18 $20 3 $8 24 $30 4 $8.50 34 $40 5 $9 45 $50 6 $10 60 $60 7 $12 84 $70 The Lead Zeppelin Company has decided that it will produce at least 1 dirigible. Now the question becomes, how many more dirigibles should it produce to make as much profit as possible? Use the profit-maximizing rule to explain how many dirigibles the Lead Zeppelin Company should produce to…
Action No Recycling Recycling Chemical Lab (Dollars) 2,400 2,100 Profit Water Park (Dollars) 1,100 1,900 Total (Dollars) Total economic profit is highest when the recycling production method is When the chemical lab uses the recycling method, the water park earns $1,900 - $1,100 = $800 more per week than it does with no recycling. Therefore, the water park should be willing to pay up to $800 per week for the chemical lab to recycle water. However, the recycling method decreases the chemical lab's economic profit by $2,400 - $2,100 = $300 per week. Therefore, the chemical lab should be willing to use the recycling method if it is compensated with at least $300 per week. Suppose the water park has the property rights to the lake. That is, the water park has the right to a clean (unpolluted) lake. In this case, assuming the two firms can bargain at no cost, the chemical lab will the recycling method and will pay the water park per week. Now, suppose the chemical lab has the property…
Consider a firm with the market demand function for its product given by: p =1000 – 2Q; and total cost of production given by: TC = Q3 – 59Q2 + 1315Q + 2000. (a) Obtain the firm’s Total Revenue function. (b) Find the amount of Total Revenue when the firm sells 30 units of output. (c) Obtain the firm’s Profit function. (d) Find the amount of Total Profit when the firm sells 30 units of output.
For each lettered space in the following table, determine the appropriate dollar amount.
Given Question #1 Cost function C= 3000+6Q Q = 4400 - 200Q Q= 1600 P = 14 Profit= 22400-12600 = 9800 Question #2 Q=$480 - Laredo Q=$1120 - SA Question #3 Ed=−1.25 - Laredo Ed=−0.55 - SA 0.5<0.8− markup index it is charging less. - Laredo 0.64<-1/-0.55--markup index it is charging less. - SA Please answer question number #4 (A-C) For Laredo only