Question

In: Accounting

The number of units of a product demanded each month is a linear function of the...

The number of units of a product demanded each month is a linear function of the selling price of the item. At a selling price of $10, 400 units of the product are demanded each month, and 100 units of the product are demanded each month at a selling price of $25 per item. The company that produces the product has monthly fixed costs of $1000 and each unit costs the company $4 to produce.

  1. Write an equation for the number of units of a product demanded each month, q, in terms of the selling price of the item, p.
  2. Write an equation for the monthly revenue of this company as a function of the selling price of the product, p.
  3. Find the maximum monthly revenue for this company.
  4. Determine the monthly demand when the monthly revenue is maximized.
  5. Write a monthly cost equation for this company as a function of the selling price of the product, p.
  6. At what selling price(s) will the company break even?

no calculus please!

Solutions

Expert Solution

Since you have not to use calculus i have used quadratic equations to solve the question last part.

The formula is very easy and i have written the formula while solving it but feel free to search more on it.

In the 3rd page the fixed cost is 1000 i have corrected it but in case you could not understand.

Hope it helps you.

All the best ?

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Price Market Quantity Demanded Social Quantity Demanded ($) (units per month) (units per month) 20 10...
Price Market Quantity Demanded Social Quantity Demanded ($) (units per month) (units per month) 20 10 20 18 20 30 16 30 40 14 40 50 12 50 60 10 60 70 b. Does this product have external benefits or external costs? External benefits c. How large ($) is that externality? ? per unit
develop simple linear regression models for predicting sales as a function of the number of each...
develop simple linear regression models for predicting sales as a function of the number of each type of ad. Compare these results to a multiple linear regression model using both independent variables. State each model and explain R- square, significance F and P-values. Concert Sales Thousands of Thousands of Sales ($1000) Radio&TV ads Newspaper ads $1,119.00 0 40 $973.00 0 40 $875.00 25 25 $625.00 25 25 $910.00 30 30 $971.00 30 30 $931.00 35 35 $1,177.00 35 35 $882.00...
If the average inventory is 4,000 units and the number of units ordered per month is...
If the average inventory is 4,000 units and the number of units ordered per month is 15,000​, compute the number of orders per month. Round to two decimals.
5. For each piecewise linear function, graph the function and find:     ...
5. For each piecewise linear function, graph the function and find:      2 lim x f x      2 lim x f x (a) { ? + 3 ?? ? < 2 2? + 1 ?? ? ≥ 2 (b) ?(?) = { ? − 2 ?? ? < 2 ? + 1 ?? ? ≥ 2 6. For each piecewise linear function, graph the function and find:    x...
1. At the start of the month, there are 750 units of a given product in...
1. At the start of the month, there are 750 units of a given product in stock. Sales per month follow a normal distribution where μ = 700 and σ = 25 (what we in fact have is a discrete distribution; the normal distribution should therefore be viewed as an approximation). a. Calculate the probability that the stock will be used up by the end of the month b. The supplier wants to reduce the risk of running out of...
1a. Lusk Corporation produces and sells 15,100 units of Product X each month. The selling price...
1a. Lusk Corporation produces and sells 15,100 units of Product X each month. The selling price of Product X is $21 per unit, and variable expenses are $15 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $72,000 of the $101,000 in fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the company’s overall net operating income would: 1b....
For each of the following, find the linear to linear function f(x) satisfying the given requirements....
For each of the following, find the linear to linear function f(x) satisfying the given requirements. (a)    f(0) = 0, f(10) = 15, f(20) = 20 (b)    f(0) = 15, f(5) = 6, f(20) = 5 (c)     f(10) = 8, f(30) = 12,and the graph of f(x) has y = 20 as its horizontal asymptote
The quantity demanded x each month of Russo Espresso Makers is 250 when the unit price...
The quantity demanded x each month of Russo Espresso Makers is 250 when the unit price p is $150; the quantity demanded each month is 1000 when the unit price is $120. The suppliers will market 750 espresso makers if the unit price is $50. At a unit price of $60, they are willing to market 1500 units. Both the demand and supply equations are known to be linear. Find the supply and demand equations. Find the equilibrium price and...
Maximizing Profits The quantity demanded each month of the Walter Serkin recording of Beethoven's Moonlight Sonata,...
Maximizing Profits The quantity demanded each month of the Walter Serkin recording of Beethoven's Moonlight Sonata, produced by Phonola Media, is related to the price per compact disc. The equation p = −0.00044x + 10 (0 ≤ x ≤ 12,000) where p denotes the unit price in dollars and x is the number of discs demanded, relates the demand to the price. The total monthly cost (in dollars) for pressing and packaging x copies of this classical recording is given...
The quantity demanded x each month of Russo Espresso Makers is 250 when the unit price...
The quantity demanded x each month of Russo Espresso Makers is 250 when the unit price p is $135. The quantity demanded each month is 1000 when the unit price is $105. The suppliers will market 700 espresso makers when the unit price is $66. At a unit price of $96, they are willing to market 2200 units. Both the supply and demand equations are known to be linear. (a) Find the demand equation. p =   (b) Find the supply...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT