I. Desktop Publishing Software, Inc Desktop Publishing Software, Inc., develops and markets software packages for business computers. Although sales have grown rapidly during recent years, the company's management fears that a recent onslaught of new competitors may severely retard future growth opportunities. Therefore, it believes that the time has come to "get big or get out." The marketing and accounting departments have provided management with the following monthly demand and cost information: P = $1,000 - $1Q TC = $50,000 + $100Q

I. Desktop Publishing Software, Inc Desktop Publishing Software, Inc., develops and markets software packages for business computers. Although sales have grown rapidly during recent years, the company's management fears that a recent onslaught of new competitors may severely retard future growth opportunities. Therefore, it believes that the time has come to "get big or get out." The marketing and accounting departments have provided management with the following monthly demand and cost information: P = $1,000 - $1Q TC = $50,000 + $100Q

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

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).
The table below lists Bruno's Custom Bike Shop's costs and revenue for the month of May: Bike Parts: $5,000 Shop Rent: $1,000 Large Print Sign Advertisements: $ 50 Electric Bill: $150 Total Bike Sales: $9,000 Based on this information, determine Bruno's Custom Bike Shop's accounting profit for the month of May.
The following data describe the firm's monthly demand and monthly costs for a manufacturer of electronic components. 1. Complete the following cost and revenue schedules for this company. Total Average Marginal Marginal Cost per Variable Variable Average Price per Cost per Total Cost Revenue per Cost for Quantity of boxes of per box of box of 1000 units Total box of 1000 box of units Fixed Total box of Revenue units 1000 units 1000 units produced Cost Cost 1000 units 1000 units $0 $800 $800 $1,700 $1,575 $1,450 $1,325 1 $1,028 $1,074 $1,117 $1,184 $1,303 2 3 4 5 $1,200 6. $1,075 $950 $1,498 7 $1,753 8 $825 $2,103 (a) What is the profit maximizing (or loss minimizing) quantity of boxesthat this company should supply? Why? (b) What price will the company charge? How is this price determined? Will this result in economic profits? (c) If the company charged a higher price than what you found in (b) above, what would happen? (d) What market structure do you think this company participates…
Thread Club produced 700 sweatshirts with a production cost $11.25 per sweatshirt. This month, they have sold 500 sweatshirts at $18.50 per sweatshirt. Based on this information, Thread Club's accounting profit for this month would be?
Assume the following cost data are for a purely competitive producer Total Product AFC AVC ATC MC 0 1 $60 $45 $105 $45 2 $30 $42.50 $72.50 $40 3 $20 $40 $60 $35 4 $15 $37.50 $52.50 $30 5 $12 $37 $49 $35 6 $10 $37.50 $47.50 $40 7 $8.57 $38.57 $47.14 $45 8 $7.50 $40.63 $48.13 $55 9 $6.67 $43.33 $50 $65 10 $6.00 $46.50 $52.50 $75 In the table below, complete the short run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3) 1 2 3 4 Price Quantity supplied, single firm Profit (+) or loss (-) Quantity supplied, 1500 firms $26 $32 $38 $41 $46 $56 $66
Assume demand is given as P = $2500-$25Q. The firm has a fixed cost of $3000 and variable costs of $2000 +$1.50 2A. Write out the firm's total revenue equation. B. Determine the Qvalue(s) where TR = 0. Determine the Q value where TR is maximum. C. Write out the firm's total cost function. D. Determine the firm's breakeven point(s) algebraically
Management has at its disposal the following information: Demand (price) function: P =423– 4.5Q Total cost function: C(Q) = 220+90Q. Using the above functions, the profit-maximizing quantity is (..............) units. (write only the number) Answer:
Management has at its disposal the following information : Demand ( price ) function : P = 600 - 0.50 Total cost function : C ( Q ) = 300+ 1000 Using the above functions , the marginal revenue function is ... Select one : O MR = 600 - QO MR = 600Q + 5Q2 MR = 600Q - Q2 O MR = 600 - 20
The Finger Lakes region in New York State produces wine. The climate favors white wines, but reds have been produced successfully in the past 15 years. Categorize the following costs incurred by one winery as either fixed or variable: Is the salary of the chief vintner, who is employed year-round and receives bonuses based on the amount of wine produced a variable or fixed cost?
Quantity of Radios Total Variable Cost Total Cost 0 $25 1 $13 $38 2 $28 3 $70 4 $64 5 $110 6 $108 7 $133 8 $185 The fixed costs of production for this firm are: Group of answer choices $0 $25 $13 can’t be determined with information provided 2) Quantity of Radios Total Variable Cost Total Cost 0 $25 1 $13 $38 2 $28 3 $70 4 $64 5 $110 6 $108 7 $133 8 $185 The total variable cost of producing 5 radios is: Group of answer choices $190 $110 $90 $85 3) Quantity of Radios Total Variable Cost Total Cost 0 $25 1 $13 $38 2 $28 3 $70 4 $64 5 $110 6 $108 7 $133 8 $185 The total cost of producing 7 radios is: Group of answer choices $140 $153 $158 none of these is correct…
Luxury Mills is a small producer of cashmere yarn, which it sells to clothing manufacturers for sweaters, coats, scarves, and other cashmere clothing. The company currently sells its yarn at $20 per unit, but costs have gone up, and the company would like to raise its prices. Further, Luxury Mills' yarn is of higher quality than that of most competitors, and the company's marketing executives feel the company can justify charging a premium price. The company's fixed costs per month are $40,000. This includes building and equipment leases, administrative expenses, salaries, and utilities. The company's variable costs for each unit of yarn produced is $10. This includes the cost of raw cashmere wool and the chemicals and dyes used to treat the wool. Choose the answer below that represents Luxury Mills' current breakeven point in units of yarn the company needs to sell each month, and the new breakeven point if Luxury Mills raises its price from $20 to $30 per unit. 2,000; 1,333 4,000;…
A manufacturer of electric switches in a competitive industry has a fixedmonthly cost of $50,000, total monthly variable cost $100,000, and marginalcost of $5. What is the profit if the monthly production is 100,000 units?Assuming that prices of switches fluctuate from month to month, what is the lowest price the manufacturer can accept in order to stay in business in the long run and in the short run. Will those prices be the same? Show detail work