You are a small retailer. You make profit by buying from a large producer and reselling at yourstore. The price you're selling at does not change with how many units you sell. The producerrecently raised their price to 150 a unit, so you're considering vertical integration and making yourown products. If the fixed cost of vertical integrating is 1,200 and you can produce with a cost of 70per unit, how many units do you have to sell for the vertical integration to yield the same profit asbefore?Enter your answer here

A company develops its operations through vertical integration, a business strategy in which it owns…

Answered: per unit, how many units do you have to…

Business

Economics

per unit, how many units do you have to sell for the vertical integration to yield the same profit as before?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Why is marginal revenue for a firm in perfect competition equal to the market price?

A: The increase in revenue that comes from selling one more unit of output is known as marginal revenue…

Q: What is the different between monoply profit and perfect competitive profit? Show them in grapphical…

A: Monopoly and perfect competition have more dissimilarity in regards pice charging , quantity produce…

Q: How is the PROCESS (steps) of adjustment or transition from short to long term equilibrium in…

A: Answers: Introduction: Perfect competition refers to the market in which there are numerous buyers…

Q: Will a Perfectly competitive market display productive efficiently? Why or why not?

A: A perfectly competitive market is the one where there are a large number of buyers (consumers) or…

Q: If TC=288-11Q + 2Q2 in perfect competition how much will each individual firm produce in the…

A: Perfect Competition is a market situation where there are large number of buyers and sellers selling…

Q: what happens to ATC and MC when companies increase the productive capabilities after they invest in…

A: Investments in productive capabilities involve spending on resources like technology, training, and…

Q: The marginal cost of supplying another unit of output of an electronic product on the internet is…

A: Marginal cost is the cost incurred on one additional unit produced as output

Q: if TC = 144 - 11Q+Q² in perfect competition how much will each individual firm produce in the…

A: A Perfectly Competitive firm maximizes profit by producing output at a firm where Price is equal to…

Q: Lt a product price of $56 Vill this firm produce in the short run? ii) If it is preferable to…

A: Short run is defined as the time period in which atleast one of the factors used is fixed and others…

Q: Can you explain to me why in the short run, firms only use variable cost to determine whether or not…

A: Shutdown point is a point of production where a firm decides not to continue production as producing…

Q: None

A: A theoretical market structure known as perfect competition is used as a standard to analyze how…

Q: Give exact answer to all parts without photo answer and take a like

A: Approach to solving the question:Given Data and Formulas; Detailed explanation:B. Profit-Maximizing…

Q: Andrea's Day Spa began to offer a relaxing aromatherapy treatment. The firm asks you how much to…

Q: Why would a profit-maximizing, perfectly competitive form continues to operate for a period of time…

A: A perfect competitive firm who is facing losses in the market will decide to shut down if the price…

Q: If the firms in a competitive industry incur an economic loss, what happens to supply, price,…

A: If firms earn economic loss, some of them will exit the market. This will decrease market supply,…

Q: Under what conditions do economies of scale serve as an entry barrier? Do the same conditions apply…

A: A Firm achieves economies of scale when with an increase in the output its average cost falls. A…

Q: How did you get the perfect competition values

A: Perfect competition market is that market where large number of buyers and sellers of the commodity…

Q: If all assumptions of perfect competition hold, why would firms in such an industry have little…

A: Meaning of Perfect Competition: The term perfect competition refers to the market under which…

Q: Small “Mom and Pop firms,” like inner city grocery stores, sometimes exist even though they do not…

A: “Mom and Pop firms” is a small independent business entity where the ownership and operations are…

Q: Should the French government relax its AOC system, allowing French vintners to expand the size of…

A: It is a complex and multifaceted question that needs careful consideration whether the French…

Question

You are a small retailer. You make profit by buying from a large producer and reselling at your
store. The price you're selling at does not change with how many units you sell. The producer
recently raised their price to 150 a unit, so you're considering vertical integration and making your
own products. If the fixed cost of vertical integrating is 1,200 and you can produce with a cost of 70
per unit, how many units do you have to sell for the vertical integration to yield the same profit as
before?
Enter your answer here

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Write an introduction

VIEW

Step 2: Compute the selling unit to earn the same profit

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions

The vast majority of industries are probably not perfectlycompetitive. Why then do you suppose economics coursesemphasize the study of perfect competition as much as they do?
What are the conditions that distinguish perfect competition from other market structures?
How did Boeing's organizational culture change after it acquired McDonnell Douglas? Focus on 1–3 dimensions that are most prominent.
Suppose Razor is the only pharmaceutical firm that sells a flu vaccine in an economy. It faces the following demand, marginal revenue, marginal cost and total cost functions. P = 70 – Q MR = 70 – 2Q MC = 10 + Q Demand: Marginal revenue: Marginal cost: Total cost: TC = 20 + 10Q + 2 Find the profit maximizing output and the price of the vaccine for the firm. Show your steps. а. b. Derive the average cost function. Show your workings. Use the result of part a and b, find the profit level of the firm. Show your workings. с. d. Suppose the government is considering a price ceiling 10 percent below the price derived in part a. I. Suggest one reason for the imposition of the price ceiling. II. i) With the price ceiling, what is the price for the vaccine? ii) Given the price in part i, how many vaccines will be purchased in the vaccine market? With the price ceiling, is there any shortage in the vaccine market? Explain your answer. iii)
What are transaction costs and why are they important to why firms exist? (hint: Coase theory)
Give examples, when the conditions of pure and perfect competition are relatively accomplished.
What are the key characteristics of perfect competition? How does monopoly differ from perfect competition? Which market achieves economic efficiency? Write an example of perfect competition, and one for monopoly.
Explain why so many entrepreneurs underprice their goods and services, especially when they first get into business.
Do you think firms really try to maximize profits? Do firms (especially small ones) know what prices they have to charge to maximize profits?
Evaluate the perfect competition market structure as a benchmark against which the functioning of all other types of market structures can be compared in terms of allocative efficiency and productive efficiency. Kindly provide a very detailed answer.
Many economists would argue that there is no such thing as perfect competition in the real world. What limitations to that theory would support their argument?
Distinguish among three types of imperfectly competitive industries and describe how imperfect competition differs from perfect competition.