Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 30, Problem 2.3P
To determine
Optimal level of inventory.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A manufacturing company leases a machine for $31,000 per year. Each unit produced costs $36 in labor and $65 in materials. To break even, 21,000 units must be sold. What is the price of the product?
A delivery company is considering adding another vehicle to its delivery fleet; each vehicle is rented for $350 per day. Assume that
the additional vehicle would be capable of delivering 1,750 packages per day and that each package that is delivered brings in $0.35
in revenue. Also assume that adding the delivery vehicle would not affect any other costs.
Instructions: Enter your answers rounded to 2 decimal places.
a. What is the MRP? What is the MRC?
MRP = $
%3|
MRC = $
Should the firm add this delivery vehicle: (Click to select) v
b. Now suppose that the cost of renting a vehicle doubles to $700 per day. What are the MRP and MRC?
MRP = $
MRC = $
Should the firm add a delivery vehicle under these circumstances: (Click to select) v
c. Next suppose that the cost of renting a vehicle falls back down to $350 per day but, due to extremely congested freeways, an
additional vehicle would only be able to deliver 750 packages per day. What are the MRP and MRC in this situation?
MRP = $
MRC = $
A delivery company is considering adding another vehicle to its delivery fleet; each vehicle is rented for $250 per day. Assume that
the additional vehicle would be capable of delivering 1,500 packages per day and that each package that is delivered brings in $0.25
in revenue. Also assume that adding the delivery vehicle would not affect any other costs.
Instructions: Enter your answers rounded to 2 decimal places.
a. What is the MRP? What is the MRC?
MRP = $
MRC = $
Should the firm add this delivery vehicle: (Click to select) ♥
b. Now suppose that the cost of renting a vehicle doubles to $500 per day. What are the MRP and MRC?
MRP = $
MRC = $
Should the firm add a delivery vehicle under these circumstances: (Click to select) ♥
c. Next suppose that the cost of renting a vehicle falls back down to $250 per day but, due to extremely congested freeways, an
additional vehicle would only be able to deliver 750 packages per day. What are the MRP and MRC in this situation?
MRP = $
MRC = $…
Chapter 30 Solutions
Principles of Economics (12th Edition)
Knowledge Booster
Similar questions
- A delivery company is considering adding another vehicle to its delivery fleet; each vehicle is rented for $300 per day. Assume that the additional vehicle would be capable of delivering 1,750 packages per day and that each package that is delivered brings in $0.30 in revenue. Also assume that adding the delivery vehicle would not affect any other costs. Instructions: Enter your answers rounded to 2 decimal places. a. What is the MRP? What is the MRC? MRP = $ MRC = $ %3D Should the firm add this delivery vehicle: Yes b. Now suppose that the cost of renting a vehicle doubles to $600 per day. What are the MRP and MRC? MRP = $ MRC = Should the firm add a delivery vehicle under these circumstances: No c. Next suppose that the cost of renting a vehicle falls back down to $300 per day but, due to extremely congested freeways, an additional vehicle would only be able to deliver 750 packages per day. What are the MRP and MRC in this situation? MRP = $ MRC = $arrow_forwardPlease use the following information and use it to complete a few calculations, and answer questions in your paper. The paper ought to be written as a brief (1-1.5 pages) report that includes your calculations and a short explanation of what the firm should do if it is making a loss. A firm currently uses 40,000 workers to produce 100,000 units of output per day. The daily wage per worker is $80, and the price of the firm's output is $41. The cost of other variable inputs is $400,000 per day. Assume that total fixed cost equals $900,000. (Note: Assume that output is constant at the level of 100,000 units per day.) Calculate the values for the following variables using the formulas that are given: · Total Variable Cost = (Number of Workers x Worker’s Daily Wage) + Other Variable Costs · Total Costs = Total Variable Costs + Total Fixed…arrow_forwardWhat stage of production is the increase in output that results from increase in a firm's outputs by some proportion? If the firm is operating efficiently, how can it reduce cost in the short run?arrow_forward
- What are some factors of production which are important for any firm to produce goods. These factors have their own identities and respective earnings which the firm keeps in consideration while proceeding for the production process.arrow_forwardResearch and briefly describe the trend of the home housing market in Australia over the past 30 years in no more than 100 words (Hint: Describe the pattern in this trend).arrow_forwardWhich of the following are short-run and which are longrun adjustments? IBM hires 200 more software engineers.arrow_forward
- Legendary for his business and investment acumen, Warren Buffett is frequently called the “Oracle of Omaha” after his birthplace in Omaha, Nebraska. As one of the world’s wealthiest business owner-investors, business executives are always interested in any insight or opinion Mr. Buffett might wish to share. Explain each one of the following statements made by Warren Buffett. (Quotations from The Wall Street Journal, September 23, 2002.) “You cannot be the high-cost producer in a commodity business.”“Sometimes it’s not even any good to be the low-cost producer.”arrow_forwardA delivery company is considering adding another vehicle to its delivery fleet; each vehicle is rented for $350 per day. Assume that the additional vehicle would be capable of delivering 1,750 packages per day and that each package that is delivered brings in 35 cents in revenue. Also assume that adding the delivery vehicle would not affect any other costs. Instructions: Enter your answers rounded to 2 decimal places. a. What is the MRP? What is the MRC? MRP = MRC = $ Should the firm add this delivery vehicle? (Click to select) = b. Now suppose that the cost of renting a vehicle doubles to $700 per day. What are the MRP and MRC? MRP = MRC = $ Should the firm add a delivery vehicle under these circumstances? (Click to select) = c. Next suppose that the cost of renting a vehicle falls back down to $350 per day but, due to extremely congested freeways, an additional vehicle would only be able to deliver 750 packages per day. What are the MRP and MRC in this situation? MRP = $ MRC = $…arrow_forwardJesse owns a shop called J's Select Store in Wisconsin. During the first year of operation, J's Select Store incurred many costs. In that year, Jesse spent $5,000 on labor, $2,000 on maintenance, and $1,000 on electricity. Jesse also put in her own money in the business, in which she would have earned $1,500 interests if she put that money in the bank, and her previous job, which she could get back at any time, paid her $50,000. a) If J's Select Store received $80,000 in revenues, what were the economics profits? b) If J's Select Store received $70,000 in revenues, what were the accounting profits?arrow_forward
- M7arrow_forwardIn order to produce a new product, a firm must lease new equipment. The managers feel that they can sell 10,000 units per year at a price of $7.50. If the variable cost of production is $5.00 per unit, what is the most the firm can spend to lease the new equipment without losing money?arrow_forwardApplication of the rule P = CMg, modified by the closure case, reveals that the continuous segment of the firm's CMg curve that lies above the CPT corresponds to its short-run supply curve. %3D Select one a. True b. Falsearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning