Short-Term Profit Maximization Because tour was the first such engine to exist, and you've spent some...

Short-Term Profit Maximization

Because tour was the first such engine to exist, and you've spent some more money in the past on advertising and branding, you can still charge a price above marginal cost, but the days of monopoly profits are behind you.

Now that you have your team oriented to this new competitive market, you need to figure out how to maximize profits in the short term. Your market research company has revised the demand to be the demand for your company's Hydro-gine, not the overall market demand for motorcycle engines that run on water, as Qd = 8,000 - 0.8P

You've correctly determined that the associated MR function is MR = 10,000 - 2.5Q. Your fixed cost has not changed --it's still $4 million. Your marginal coat also has not changed; it's still $2,000 per engine, so you have calculated that MR = MC at a quantity of 3,200 engines per year. These engines, however, now sell for a price of only $6,000. How much is your economic profit this year?

please show steps

Expert Solution

Rahul Sunny answered 2 years ago

Profit maximization does not adequately describe the goal of the firm because I. profit maximization does...

Profit maximization does not adequately describe the goal of the firm because I. profit maximization does not require the consideration of risk II. profit maximization considers the timing of a project's return III. maximization of dividend payout ratio is a better description of the goal of a firm IV. both I and II V. None of the above Which of the following goals of the firm are synonymous (equivalent) to the maximization of shareholder wealth? I. profit maximization II....

a.) Why do we focus on maximizing the shareholder wealth rather than short- term profit maximization?...

a.) Why do we focus on maximizing the shareholder wealth rather than short- term profit maximization? b.) What is the difference between maximize the EPS (earnings per share) and maximize stock price? c.)What is the agency conflict between manager and shareholder and how can we reduce this agency conflict?

Why do we focus on maximize the shareholder wealth rather than short- term profit maximization? What...

Why do we focus on maximize the shareholder wealth rather than short- term profit maximization? What is the difference between maximize the EPS (earnings per share) and maximize stock price? Also we can discuss about the agency conflict between manager and shareholder and how to reduce this agency conflict.

If a firm’s business activities do not result in profit maximization, whilst alternatives exist, then such...

If a firm’s business activities do not result in profit maximization, whilst alternatives exist, then such activities amount to irresponsible actions. Discuss any five sets of economic responsibilities firms must embrace to ensure the protection and enhancement of the business. This question relate to Ethics and Corporate Social Responsibility

Should stockholder wealth maximization be thought of a long-term or a short-term goal? Which approach is...

Should stockholder wealth maximization be thought of a long-term or a short-term goal? Which approach is better? Explain and think of some specific corporate actions that have these tendencies

1. 1. Discuss the conditions for profit maximization for the perfectly competitive firm in the short...

1. 1. Discuss the conditions for profit maximization for the perfectly competitive firm in the short run. In addition to the basic criteria, describe the cost and revenue situations on either side and why, in terms of cost and revenue, the firm will move toward that optimal point. Consider an avocado farmer operating as such a firm. He owns four acres of land on which to plant a single crop. To plant one acre of avocados, he must pay $30...

Represent, on a clearly labelled graph, the point(s) of short-run profit maximization for a firm with...

Represent, on a clearly labelled graph, the point(s) of short-run profit maximization for a firm with production technology given by y=f(x1,x2) where x2 is assumed to be fixed. USING ISO COSTS

shareholder maximization is when a corporation focuses on mostly short-term success in order to please the...

shareholder maximization is when a corporation focuses on mostly short-term success in order to please the shareholders. As well as their executives who have stock ownership and stock options as incentives for their stocks to do well. Ultimately, maximizing shareholder value is achieved by increasing the stock’s price over time and increasing dividends. While it’s important to have positive results of a company’s stock price but it’s important for the company to consider the employees and their customers. “According to...

Define short-term management What are some strategies for effective short-term management

What is the difference between minimum total cost and short-range profit maximization policies in system design?

Question