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The cost the upstream mill incurs for producing enough paper (one "unit" of paper) to make one unit of boxes is $12.50. Assume the two mills operate as separate profit centers, and the paper mill sets the price of paper. It follows that the marginal profitability of boxes represents the highest price that the box division would be willing to pay the paper division for boxes.. Furthermore, assume that fixed costs are $0 for the paper mill. The following table summarizes the quantity, total revenue, and marginal costs from the perspective of the paper mill for selling paper to the box mill at various prices. In the following table, fill in the marginal revenue, total cost, and total profit for the paper mill when selling paper to the box mill at each given price. Marginal Cost Price (Marginal Profitability to the Box Mill) ($) $40 $36 $32 $28 $24 $20 $16 $12 $8 $4 Quantity (Units of Paper equivalent to One Box) 1 2 3 4 5 6 7 8 9 10 Total Revenue Marginal revenue ($) In this case, the box mill will demand $40 $72 $96 $112 $120 $120 $112 $96 $72 $40 ($) $ $ $ $ If the paper mill sets the price of paper to sell to the box mill, it will set a price of for the paper mill. Companywide profits will be $ marginal profitability of each unit of paper, or box, to the box mill.) Total Cost ($) $12.50 $ $ $ $ Suppose the paper mill is forced to transfer paper to the box mill at marginal cost ($12.50). units of paper. This leads to companywide profits of S ($) $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 Profit ($) $ $ S S and sell units of paper to the box mill. Profits will be (Hint: Recall that the prices in the table represent the

The cost the upstream mill incurs for producing enough paper (one "unit" of paper) to make one unit of boxes is $12.50. Assume the two mills operate as separate profit centers, and the paper mill sets the price of paper. It follows that the marginal profitability of boxes represents the highest price that the box division would be willing to pay the paper division for boxes.. Furthermore, assume that fixed costs are $0 for the paper mill. The following table summarizes the quantity, total revenue, and marginal costs from the perspective of the paper mill for selling paper to the box mill at various prices. In the following table, fill in the marginal revenue, total cost, and total profit for the paper mill when selling paper to the box mill at each given price. Marginal Cost Price (Marginal Profitability to the Box Mill) ($) $40 $36 $32 $28 $24 $20 $16 $12 $8 $4 Quantity (Units of Paper equivalent to One Box) 1 2 3 4 5 6 7 8 9 10 Total Revenue Marginal revenue ($) In this case, the box mill will demand $40 $72 $96 $112 $120 $120 $112 $96 $72 $40 ($) $ $ $ $ If the paper mill sets the price of paper to sell to the box mill, it will set a price of for the paper mill. Companywide profits will be $ marginal profitability of each unit of paper, or box, to the box mill.) Total Cost ($) $12.50 $ $ $ $ Suppose the paper mill is forced to transfer paper to the box mill at marginal cost ($12.50). units of paper. This leads to companywide profits of S ($) $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 Profit ($) $ $ S S and sell units of paper to the box mill. Profits will be (Hint: Recall that the prices in the table represent the

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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vate X Student Portal | Main CENGAGE MINDTAP gage.com/static/nb/ui/evo/index.html?deploymentid=57962518850017814342930411958eISBN=9781337106603&id=1810088554&snapshotid=3502477& Problems: Chapters 21 and 22 The cost the upstream mill incurs for producing enough paper (one "unit" of paper) to make one unit of boxes is $12.50. X Assume the two mills operate as separate profit centers, and the paper mill sets the price of paper. It follows that the marginal profitability of boxes represents the highest price that the box division would be willing to pay the paper division for boxes.. Furthermore, assume that fixed costs are $0 for the paper mill. Price (Marginal Profitability to the Box Mill) ($) The following table summarizes the quantity, total revenue, and marginal costs from the perspective of the paper mill for selling paper to the box mill at various prices. $40 $36 $32 $28 $24 $20 $16 $12 $8 $4 ECN-601 Class Resources In the following table, fill in the marginal revenue, total cost, and total profit for the paper mill when selling paper to the box mill at each given price. Marginal Cost Quantity (Units of Paper equivalent to One Box) 1 2 3 4 5 6 7 " 8 9 10 Total Revenue Marginal revenue ($) $40 $72 $96 $112 $120 $120 $112 $96 x MindTap - Cengage Learning X + $72 $40 ($) ^^^^^^^^^ $ $ S $ S $ $ $ If the paper mill sets the price of paper to sell to the box mill, it will set a price of for the paper mill. Companywide profits will be $ $ marginal profitability of each unit of paper, or box, to the box mill.) Total Cost ― Q Search ($) $12.50 $ $ Suppose the paper mill is forced to transfer paper to the box mill at marginal cost ($12.50). $ $ $ In this case, the box mill will demand units of paper. This leads to companywide profits of $ ($) $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 Co Profit ¡I ($) $ $ and sell units of paper to the box mill. Profits will be . (Hint: Recall that the prices in the table represent the S S $ $ $ S $ S
Transcribed Image Text:vate X Student Portal | Main CENGAGE MINDTAP gage.com/static/nb/ui/evo/index.html?deploymentid=57962518850017814342930411958eISBN=9781337106603&id=1810088554&snapshotid=3502477& Problems: Chapters 21 and 22 The cost the upstream mill incurs for producing enough paper (one "unit" of paper) to make one unit of boxes is $12.50. X Assume the two mills operate as separate profit centers, and the paper mill sets the price of paper. It follows that the marginal profitability of boxes represents the highest price that the box division would be willing to pay the paper division for boxes.. Furthermore, assume that fixed costs are $0 for the paper mill. Price (Marginal Profitability to the Box Mill) ($) The following table summarizes the quantity, total revenue, and marginal costs from the perspective of the paper mill for selling paper to the box mill at various prices. $40 $36 $32 $28 $24 $20 $16 $12 $8 $4 ECN-601 Class Resources In the following table, fill in the marginal revenue, total cost, and total profit for the paper mill when selling paper to the box mill at each given price. Marginal Cost Quantity (Units of Paper equivalent to One Box) 1 2 3 4 5 6 7 " 8 9 10 Total Revenue Marginal revenue ($) $40 $72 $96 $112 $120 $120 $112 $96 x MindTap - Cengage Learning X + $72 $40 ($) ^^^^^^^^^ $ $ S $ S $ $ $ If the paper mill sets the price of paper to sell to the box mill, it will set a price of for the paper mill. Companywide profits will be $ $ marginal profitability of each unit of paper, or box, to the box mill.) Total Cost ― Q Search ($) $12.50 $ $ Suppose the paper mill is forced to transfer paper to the box mill at marginal cost ($12.50). $ $ $ In this case, the box mill will demand units of paper. This leads to companywide profits of $ ($) $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 Co Profit ¡I ($) $ $ and sell units of paper to the box mill. Profits will be . (Hint: Recall that the prices in the table represent the S S $ $ $ S $ S
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