Question

Gamma Corp. manufactures and sells widgets for $6.00 each. Therefore, its total revenue, TR, from the sale of X widgets in a year is

TR=$6X

It costs Gamma $2 for materials and labour to produce each widget. In addition, Gamma expects to incur $80,000 of other costs during a year. Therefore, Gamma’s total costs for the year, TC, are expected to be

TC =$2X+ $80,000

Gamma’s expected net income, NI, for the year will be

NI =TR -TC

=$6X - ($2X+$80,000)

=$4X-$80,000

PLEASE ANSWER ALL QUESTIONS WILL FULL WORKINGS

a. What is the slope and TR-intercept of a TR vs. X plot? (NEED ANSWERS WILL FULL AND CLEAR WORKINGS)

b. What is the slope and TC-intercept of a TC vs. X plot? (NEED ANSWERS WILL FULL AND CLEAR WORKINGS)

c. What is the slope and NI-intercept of an NI vs. X plot?(NEED ANSWERS WILL FULL AND CLEAR WORKINGS)

d. Which of the three plotted lines is steepest? (NEED ANSWERS WILL FULL AND CLEAR WORKINGS)

e. How much does NI increase for each widget sold?(NEED ANSWERS WILL FULL AND CLEAR WORKINGS)

f. If Gamma were able to reduce its materials and labour cost to $1.75 per widget, state for each plotted line whether its slope would increase, decrease, or remain unchanged. (NEED ANSWERS WILL FULL AND CLEAR WORKINGS)

PLEASE ANSWER ALL QUESTIONS WILL FULL WORKINGS. PLEASE SHOW HOW THE ANSWER WAS DERIVED

Answer 1

increas from 4 to 4.25