TTV Corporation's managers estimate that a 50% increase in price would cause an 80% reduction in the quantity of product sold. Total fixed costs for the product are $5,000 and total variable costs are $4,000, based on production of 400 units. The following values may be useful: In (0.2) = -1.609 In (0.5) = -0.693 In (0.8) = -0.223 In (1.5) = 0.405 In (4,000) = 8.294 In (5,000) = 8.517 TTV's profit maximizing price is: $2.44 $3.37 $7.57 $13.36

TTV Corporation's managers estimate that a 50% increase in price would cause an 80% reduction in the quantity of product sold. Total fixed costs for the product are $5,000 and total variable costs are $4,000, based on production of 400 units. The following values may be useful: In (0.2) = -1.609 In (0.5) = -0.693 In (0.8) = -0.223 In (1.5) = 0.405 In (4,000) = 8.294 In (5,000) = 8.517 TTV's profit maximizing price is: $2.44 $3.37 $7.57 $13.36

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: The monthly cost function, in dollars, for a coffee maker factory is C(x) where x is the number of…

A: Cost function for a coffee makers produced= C(x) where; x= Number of makers produced Total cost;…

Q: Suppose a company has fixed costs of $40,800 and variable cost per unit of x+222 dollars, where x is…

A: The fixed cost is given as $40800The variable cost per unit is The selling price of the product is

Q: Suppose the following costs for a 10-hour round-trip flight apply to the time frame and expenses of…

A: Fixed cost refers to those cost that are not affected by the change in production. In other words,…

Q: Suppose a company has fixed costs of $36,000 and variable cost per unit of +222 dollars, where x is…

A: Since you have posted a question with multiple sub-parts, we will provide the solution to only the…

Q: The cost function for flavored coffee at an upscale coffeehouse is given in dollars by C(x) = 3x +…

A: The break-even point is the sum of earnings required to fund a business's cumulative fixed and…

Q: Your last submission is used for your score. 1. Need Help? Read It عيمي Burnem Inc. manufactures…

A: 1.) Substitute y= $408, 200 to the equation. y = 653,000 - 1800x…

Q: Extreme Protection, Inc. manufactures helmets for skiing and snowboarding. The fixed costs for one…

Q: A chemical engineer at Tesoro Refining estimated the total cost for a diesel fuel desulfurization…

A: The cost factor technique can be used to determine the equipment cost. Cr=hCE Where, Cr= Estimated…

Q: A certain seed and fertilizer company compiled the following estimates for its operations. Capacity…

A: The total amount of money received from the sale of goods or services connected to a business's main…

Q: Given the average cost function as below, find the MC function. * AC=Q²-40+174 A) 20-4 B) 20-4+174…

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Q: A company makes solar panels. The company’s revenue function, in dollars, is R(n)=10n , where n is…

A: Note: Since more than 3 sub-questions are asked, due to Bartleby policy we are allowed to answer not…

Q: The function E sold. Find a) the profit when 75 units are sold + 1900z 3000 gives the profit when a…

A: Profit:Profit is the money earned after all the costs or expenditures are deducted from the revenue.…

Q: The average total cost of producing electronic calculators in a factory is $26 at the current output…

A: Average total cost is the total of all production costs divided by the amount of output produced. It…

Q: A manufacturing company produces solar panels. The variable costs are $20 per unit and fixed costs a…

A: The revenue is defined as the total income a business receives from selling a good or service to its…

Q: The total cost C for a manufacturer during a given time period is a function of the number N of…

A: Slope = 20Initial Value = $1020Formula Total Cost = Fixed Cost + Variable Cost

Q: The demand and cost function for a company are estimated to be as follows: P = 100 - Q…

A: A demand function is an equation that represents the relationship between the quantity demanded of a…

Q: For April 2021, the actual cost per ASM (available seat mile) for Southwest Airlines was…

A: For Profit maximization, a firm operates at an output level where Marginal Cost is equal to Marginal…

Q: K Drilling of an oil well has a fixed cost of $40,000 and a marginal cost of M'(x) = 5000+56x…

A: Marginal cost is the change in variable cost incurred to produce an additional unit of good.

Q: A study of 86 savings and loan associations in six northwestern states yielded the following cost…

A: A cost function is a functional relationship between cost and output.It can be expressed as, where C…

Concept explainers

Inflation and Purchasing Power Theory

In economic terms, Inflation refers to the increase in the costs of various commodities which are used in daily lifestyle like food, clothes, transport, etc. over a specific time. It may lead to a fall in the purchasing power of the people and also affects the exchange rate of the currency because of the price increase. As the purchasing power falls the unit of the currency in the economy falls. When the prices of the commodities are decreased, then the purchasing power of the consumers will rise, then it will lead to deflation and changes the currency of the base economy to that of the foreign economy which will lead to change in exchange rates.

Question

TTV Corporation's managers estimate that a 50% increase in price would cause an 80% reduction in the quantity of product sold. Total fixed costs for the product are $5,000 and total variable costs
are $4,000, based on production of 400 units. The following values may be useful:
In (0.2)
In (0.5) = -0.693
In (0.8) = -0.223
In (1.5) = 0.405
In (4,000) = 8.294
In (5,000) = 8.517
= -1.609
%3D
TTV's profit maximizing price is:
$2.44
O $3.37
$7.57
$13.36

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!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

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

A company sells one of the items in its product line for $8.90 each. The variable costs per unit is $3.90, and the associated fixed costs per week are $2,200. If the total revenue is $9,434 per week, then determine each of the following quantities: (1) The weekly level of output (n), that is the number of items produced and sold, is units. (2) The total variable costs (TVC) per week is $ (3) The net income (NI) per week is $ (4) The break-even volume (nBE) per week is even volume is not an integer, round up to the next integer.) units. (Hint: If the break- (5) The break-even revenue (TRBE) per week, rounded to the nearest cent, is $
The revenue and cost functions for a particular product are given below. The cost and revenue are given in dollars, and xrepresents the number of units . R(x) = −0.2x2 + 172x C(x) = 78x + 10065 (a) How many items must be sold to maximize the revenue?(b) What is the maximum revenue?
The Precision Machine Tool Manufacturing Company has the following total costfunction: C=Q3 -8Q2 + 25Q Find the AC and MC functions and show that at the minimum point of AC, MC = AC.
please complete part D for both Thank you
Jet Services is a manufacture of parts for the commercial aircraft. The company is established in Taiwan and its headquarters is in Taipei City. Suppose that the cost function for a product is given by: TC (Q) = 4,800 - 18Q + 0.04Q2 Find the production level that will lead to the minimum average cost per unit AC (Q)
Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form AVC = a + bQ + cQ2 and obtained the following results. Total fixed cost (TFC) at Straker Industries is $1,000. DEPENDENT VARIABLE: AVC R-SQUARE F-RATIO P-VALUE ON F OBSERVATIONS: 35 0.8713 108.3 0.0001 VARIABLE PARAMETER ESTIMATE STANDARD ERROR T-RATIO P-VALUE INTERCEPT 43.40 13.80 3.14 0.0036 Q −2.80 0.90 −3.11 0.0039 Q2 0.20 0.05 4.00 0.0004 If Straker Industries produces 12 units of output, what is estimated short-run marginal cost (SMC)? a. $28.04 b. $62.60 c. $32.40 d. $33.33
The function P(x) - 1.25x² + 775x - 7000 gives the profit when x units of a certain product are sold. Find a) the profit when 85 units are sold = dollars b) the average profit per unit when 85 units are sold dollars per unit c) the rate that profit is changing when exactly 85 units are sold dollars per unit d) the rate that profit changes on average when the number of units sold rises from 85 to 170. dollars per unit e) The number of units sold when profit stops increasing and starts decreasing. (Round to the nearest whole number if necessary.) units
An average variable cost function is estimated as AVC = 96-2Q + 0.05Q2. Which of the following cost functions is associated with this estimate? a. MC = -2Q + 0.1Q2 b. TVC = 96Q-2Q2 + 0.1Q3 c. TVC = 96Q - 4Q2 +0.15Q3 d. MC 96-4Q+0.15Q2 =
Antoine rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20, to cover maid service and utilities. His fixed costs are $100,000 and his profit last year was $20,000. For Antoine, the contribution per unit is $100 $80 $1005 $800
Suppose the company lacks confidence in the accuracy of cost estimates expressed in a cubic equation and simply wants to use a linear approximation. Suggest a linear representation of this cubic equation. What difference would it make on the recommended profit-maximizing and revenue-maximizing prices
I need help understanding how to solve this
A manufacturer estimates that its product can be produced at a total cost of c(x)=40,000+100x+x^3 dollars. If the manufacturer's total revenue from the sale of x units is R(x)=4300x dollars, determine the level of production x that will maximize the profit. Find the maximum profit.