Average Real Price/Ton Nominal Nominal Mfg. Rep's Earnings Revenue Commission Total Cost before Tax (S000) -129.840 -7.479 17.728 71.792 96.216 91.405 90.680 67.994 -11.670 -21.065 Sales Price ($000) 129.840 251.454 309.175 425.488| 492.402| 541.866 605.633 727.298 988.973 1042.133 ($000) ($000) ($000) Rate 5% 5% 5% 5% 5% 5% 5% 5% 6% 6% (Tons) 2001 2h 2002 1h 2002 2h 2003 1h 2003 2h 2004 1h 2004 2h 2005 1h 2005 2h 2006 1h 75 100 150 175 185 200 225 275 2.004 1.997 2.004 2.004 2.004 2.006 2.001 2.002 2.003 3.253 243.975 3.269 326.903 3.315 497.280 3.364 588.618 633.271 3.423 696.312 3.482 3.535 795.292 3.554 977.303 3.583 1021.067 285
Average Real Price/Ton Nominal Nominal Mfg. Rep's Earnings Revenue Commission Total Cost before Tax (S000) -129.840 -7.479 17.728 71.792 96.216 91.405 90.680 67.994 -11.670 -21.065 Sales Price ($000) 129.840 251.454 309.175 425.488| 492.402| 541.866 605.633 727.298 988.973 1042.133 ($000) ($000) ($000) Rate 5% 5% 5% 5% 5% 5% 5% 5% 6% 6% (Tons) 2001 2h 2002 1h 2002 2h 2003 1h 2003 2h 2004 1h 2004 2h 2005 1h 2005 2h 2006 1h 75 100 150 175 185 200 225 275 2.004 1.997 2.004 2.004 2.004 2.006 2.001 2.002 2.003 3.253 243.975 3.269 326.903 3.315 497.280 3.364 588.618 633.271 3.423 696.312 3.482 3.535 795.292 3.554 977.303 3.583 1021.067 285
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
what is the profit maximization for this chart? I know MR must equal MC MR=MC for profit maximization to occur. So how would I solve this problem here?
I want to know if this market is profitable.
Transcribed Image Text:The table below presents the nominal and marginal revenue over several periods from the second half of 2001 to the first half of 2006. This information is useful for analyzing the financial progression and performance over the specified timeframes.
| Period | Nominal Revenue | Marginal Revenue |
|----------|-----------------|------------------|
| 2001 2h | 243.975 | - |
| 2002 1h | 326.907 | 82.932 |
| 2002 2h | 497.280 | 170.373 |
| 2003 1h | 588.618 | 91.338 |
| 2003 2h | 633.271 | 44.653 |
| 2004 1h | 696.312 | 63.041 |
| 2004 2h | 795.295 | 98.983 |
| 2005 2h | 977.303 | 182.008 |
| 2006 1h | 1021.067 | 43.764 |
**Analysis:**
- The table starts with a nominal revenue of 243.975 in the second half of 2001.
- A steady increase in both nominal and marginal revenues is observed in subsequent periods.
- Marginal revenue is calculated as the difference in nominal revenue between two consecutive periods not available for the first entry (2001 2h).
- By 2006 1h, nominal revenue reaches 1021.067, showcasing consistent growth.
Transcribed Image Text:This table presents data on sales and financial metrics over several half-year periods, from the second half of 2001 to the first half of 2006. Here's a detailed transcription:
**Columns:**
1. **Sales (Tons)** - The amount of product sold in tons for each period.
2. **Average Real Price/Ton ($000)** - The average real price per ton in thousands of dollars.
3. **Nominal Price ($000)** - The price per ton without adjustment for inflation, in thousands of dollars.
4. **Nominal Revenue ($000)** - Revenue in thousands of dollars calculated using the nominal price.
5. **Mfg. Rep's Commission Rate** - The manufacturing representative's commission rate as a percentage.
6. **Total Cost ($000)** - Total costs incurred in thousands of dollars.
7. **Earnings before Tax ($000)** - Earnings before tax in thousands of dollars.
**Data Breakdown:**
- **2001 2h**: No sales were recorded. The total cost was $129,840, resulting in a negative earnings before tax of -$129,840.
- **2002 1h**: Sales of 75 tons at an average real price of $2.004k per ton. The nominal price was $3.253k, resulting in nominal revenue of $243,975. The commission rate was 5%, and the total cost was $251,454, leading to earnings before tax of -$7,479.
- **2002 2h**: Sales increased to 100 tons with a slight decrease in average real price to $1.997k. The nominal price was $3.269k, and revenue was $326,903. Total costs were $309,175, leading to a positive earnings before tax of $17,728.
- **2003 1h**: Sales rose to 150 tons. The average real price was $2.004k, with nominal revenue at $497,280, and total costs at $425,488, generating earnings before tax of $71,792.
- **2003 2h**: Sales were 175 tons. The real price remained at $2.004k; however, nominal revenue increased to $588,618. With total costs of $492,402, earnings before tax were $96,216.
- **2004 1h**:
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education