Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Question
Chapter 8, Problem 13P
(a):
To determine
Plot the cost line.
(b):
To determine
Calculate the breakeven point.
(c):
To determine
Change in the breakeven point.
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(a) How would one estimate the full cost to an airline if one of its planes is held over for 24 hours in an airport for repair?
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Problem: A large company has determined the relationship between the price (p) of their product and the demand (D) as p = 450 - 0.03D. The fixed cost per year is $500,000 and the variable cost per unit is $101.50. a. Determine the optimal demand (D) to maximize profit? b. How much is the maximum profit? c. What are the break-even points in terms of number of units? d. What are the revenues and total costs at these break even-points?
swered
Costs per Unit (dollars)
1000
900
800
700
600
500
400
300
200
100
0
4
Average total
cost
B
Marginal
cost
Output (units per day)
Average
variable cost
Average fixed cost
22
24
How many units of output should be produced per day if the price of the product
is
$600/unit? (provide an approximate answer in whole numbers)
Chapter 8 Solutions
Contemporary Engineering Economics (6th Edition)
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