Henry Ford’s Model T was originally designed and built to run on ethanol. Today, ethanol (190-proof alcohol) can be produced with domestic stills for about $0.85 per gallon. When blended with gasoline costing $4.00 per gallon, a 20% ethanol and 80% gasoline mixture costs $3.37 per gallon. Assume fuel consumption at 25 mpg and engine performance in general are not adversely affected with this 20–80 blend (called E20). (1.3)
- a. How much money can be saved for 15,000 miles of driving per year?
- b. How much gasoline per year is being conserved if one million people use the E20 fuel?
Want to see the full answer?
Check out a sample textbook solutionAdditional Business Textbook Solutions
Essentials of MIS (13th Edition)
Financial Accounting, Student Value Edition (5th Edition)
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Horngren's Accounting (12th Edition)
- An exporter of handbags has just entered a new market. This exporter faces the following relationship between the price of handbags and the demand for them: P=15+ 4,800 2,500 D D² D>0 where P is the price per unit and D is the demand per month. The exporter wants to maximize his profit. The fixed cost is P2342 per month and the variable cost #30 per unit. How many handbags should be produced and sold each month, in order to maximize profit? Round your answer to 0 decimal places.arrow_forwardThe GetUFit Company manufactures elliptical machines. The variable cost per unit to produce a model designed for in-home use is $500. The firm sold 1,311 of these machines at a price of $1,959. When the price was decreased to $1,613, sales increased to 2,256 units. Assuming all else equal and a linear demand function, calculate the profit maximizing price that GetUFit should charge for the machine. Currency (US) FREEarrow_forwardThe purchase of a used pick-up truck for $9,000 is being considered. Records for other vehicles show that costs for oil, tires, and repairs roughly equal the cost for fuel. Fuel costs are $990 a year if the truck is driven 16,000 km. The salvage value after five years of use drops by $0.05 per km. Find the equivalent uniform annual cost if the discount rate is 8%. How much does this change if the annual mileage is 24,000 km? 8,000 km? Assume that, drop in Salvage Value is based on total kilometers driven, rather than the annual distance driven.arrow_forward
- Please solve ones that were marked incorrect (x).arrow_forwardA large company in the communication and publishing industry hs quantified the relationship between the price of one of its products and the demand for this product as Price = 160 -0.01 xDemand for an annual printing of this particular product. The foxed costs per year (ie. per printing) = $4T 000 and the variable cost per unit = $35. What is the maximum profit that can be achieved? What is the unit price at this point of optimal demand? Demand is not expected to be more than 7,000 units per year. The maximum profit that can be achieved is S. (Round to the nearest dolar.) The unit price at the point of optimal demand is S per unit (Round to the nearest cent)arrow_forwardIf the supply equation is Q = 110 + 8P+0.9p2 (a) find the price elasticity of supply if the current price is 9. (b) estimate the percentage change in supply if the price rises by 2%arrow_forward
- Redleaf company's market research department works on the manufacture and marketing of a winter tire for vehicles. Currently the price is 10$, and the demand is 13000 units. When the price is increased to 15$, the company expects the demand to be 8500 units (assume that price is linearly related to demand.). Company is following a make-to-order policy for their production, meaning that they make production as much as ordered from their dealers. The dealers make orders 3 times a year, on January, May and September. The company has 23 dealers, who do not have any capacity restriction on their orders. Yet, the above information is a country-wise research, and shows the aggregate demand (sum of all dealers' orders) for each price. Regardless of the production amount, the company faces with a 2170$ of administrative cost for production, in addition to 1,3 $ cost of raw materials and labour costs per each units produced. If we define price as a function of demand (P(d)) using the…arrow_forwardAn oil-producing country estimates that the demand for oil (in millions of barrels per day) is D(p) = 9.5e-0.01p, where p is the price of a barrel of oil. (a) Determine the elasticity of demand function, E(p), for the oil. (b) Complete the table below and then identify the price per barrel, p, that maximizes revenue. Price per barrel, p Elasticity, E(p) 80 90 100 110 120arrow_forwardThe demand curve for CO2 systems can be considered as a kinked demand curve. One analysis company has helped and they find that the kink occurs at around 15 plants sold at a price of DKK 4.4 million. DKK per plant. At a price increase based on the kink, the analysis company estimates the price elasticity to -2. Furthermore, the analysis company has found that at a price of DKK 0, it the requested quantity is 40 plants. Derive and draw the kinked demand function and the associated MR function based on the given data. If necessary, make other necessary assumptions yourself.arrow_forward
- Answer only Earrow_forwardHelp me plzzarrow_forwardThe economically destructive price spike of 2007–2008 occurred when spare production capacity fell below 1 mbpd, causing a run-up in oil price from $50 to $145 per barrel. An issue for world oil spare capacity is the internal consumption of OPEC producers. OPEC production has ranged between 30 and 33 mbpd since 2004. Internal use is currently about 25% of total OPEC production, but it is growing by 2% per year. The internal consumption growth is largely for nonelastic end uses such as electricity generation, water treatment, and new buildings. If the current world spare capacity is 2 mbpd and the OPEC total production does not increase beyond 33 mbpd, how many years will it take for the spare capacity to fall below 1 mbpd again?arrow_forward
- Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning