Our firm’s accountants have put together the following table of costs. Generators Solar Panels Fixed Costs $2 million $2 million Variable Costs $2 million $2 million Revenue $3 million $5 million The accountants have assured us that there are no places to save money. We are at our profit maximizing quantities of each product. We are as efficient as any firm could possibly be. In answering the questions below, do not just say lower costs or increase sales. Explain all your answers. If you cannot explain why you are taking an action, then you are just guessing. How is this firm doing as a whole? How profitable are the two products individually? What would you recommend this firm do in the short run? What about the long run?
Our firm’s accountants have put together the following table of costs.
|
|
Generators |
Solar Panels |
|
Fixed Costs |
$2 million |
$2 million |
|
Variable Costs |
$2 million |
$2 million |
|
Revenue |
$3 million |
$5 million |
The accountants have assured us that there are no places to save money. We are at our profit maximizing quantities of each product. We are as efficient as any firm could possibly be. In answering the questions below, do not just say lower costs or increase sales. Explain all your answers. If you cannot explain why you are taking an action, then you are just guessing.
How is this firm doing as a whole? How profitable are the two products individually?
What would you recommend this firm do in the short run?
What about the long run?
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