Question

In: Economics

XYZ Co. has a central manufacturing facility, located in Mobile, Alabama. At this facility it makes...

XYZ Co. has a central manufacturing facility, located in Mobile, Alabama. At this facility it makes a product that it sells into two separate markets (West Coast and Mid-Atlantic).              

The company estimates the weekly demand functions for two markets to be as follows:              
              
West Coast:   Q = 4000 - 200P       Mid-Atlantic:   Q = 6000 -400P
              
The product's cost function is estimated as follows:              
              
   TC = 2000 + 10Q          
              
a. What is the company's weekly profit if the firm does not practice discrimination in               
pricing between the two markets.              
              
              
              
              
b. What is the company's weekly profit if the firm does practice discrimination in pricing              
between the two markets.              
              

Solutions

Expert Solution

Thank you

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Carlton Goods Co. makes household appliances at a single manufacturing facility. The expected demand for one...
Carlton Goods Co. makes household appliances at a single manufacturing facility. The expected demand for one of these appliances during the next four months is shown in the table below along with the expected production costs and the expected capacity for producing these items. Month 1 2                            3 4 Demand Production Cost Production Capacity 420 $49 500 580                   310 $46                   $45 520                   480 540 $47 550                                 Carlton estimates that it costs $2.50 per month for each unit of this appliance carried in inventory,...
Company XYZ wants to acquire a machine for its manufacturing facility, but is unsure whether it...
Company XYZ wants to acquire a machine for its manufacturing facility, but is unsure whether it should lease or buy. The facts are as follows: Buy: The cost of the machine at the beginning of year 1 is $110,000. At the end of year 4, XYZ will dispose of the machine for a salvage value of $10,000. Assume the interest rate is 10%. Lease: To lease the machine, XYZ must make 4 equal payments of $32,000 at the end of...
The Crantz Corporation has a central copying facility. The copying facility has only two users, the...
The Crantz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year: Budgeted costs of operating the copying facility for 400,000 to 600,000 copies: Fixed costs per year$60,000 Variable costs3 cents (.03) per copy Budgeted long-run usage in copies per year: Marketing Department120,000 copies Operations Department380,000 copies Budgeted amounts are used to calculate the allocation rates. Actual usage for the year...
Question 1 Notex Manufacturing makes various batteries used in mobile devices. The company has a major...
Question 1 Notex Manufacturing makes various batteries used in mobile devices. The company has a major customer so batteries are shipped in bulk to this customer. The company also distributes these batteries to retail stores as replacement parts. The batteries are packaged individually to retail stores. In all, the company makes about 15 different batteries. Currently, the company does not use any forecasting to predict the demand for the batteries. Instead, it has employed rule of thumb to decide about...
Acme Manufacturing makes a variety of household appliances at a single manufacturing facility. The expected demand...
Acme Manufacturing makes a variety of household appliances at a single manufacturing facility. The expected demand for one of these appliances during the next 4 months is shown in the following table along with the expected production costs and the expected capacity for producing these items. Month 1 2 3 4 Demand 420 580 310 540 Production Cost $49.00 $45.00 $46.00 $47.00 Production Capacity 500 520 450 550 Acme estimates it costs $1.50 per month for each unit of this...
JL.53 Bob's Bumpers has a repetitive manufacturing facility in Kentucky that makes automobile bumpers and other...
JL.53 Bob's Bumpers has a repetitive manufacturing facility in Kentucky that makes automobile bumpers and other auto body parts. The facility operates 330 days per year and has annual demand of 53,000 bumpers. They can produce up to 360 bumpers each day. It costs $70 to set up the production line to produce bumpers. The cost of each bumper is $82 and annual holding costs are $29 per unit. Setup labor cost is $26 per hour. 4) Suppose the customer...
JL.53 Bob's Bumpers has a repetitive manufacturing facility in Kentucky that makes automobile bumpers and other...
JL.53 Bob's Bumpers has a repetitive manufacturing facility in Kentucky that makes automobile bumpers and other auto body parts. The facility operates 320 days per year and has annual demand of 57,000 bumpers. They can produce up to 435 bumpers each day. It costs $50 to set up the production line to produce bumpers. The cost of each bumper is $88 and annual holding costs are $35 per unit. Setup labor cost is $23 per hour. What is the optimal...
Internal Control Case1 True Aussie Co. is a manufacturing company located in Melbourne. The company has...
Internal Control Case1 True Aussie Co. is a manufacturing company located in Melbourne. The company has liberal policy among its staff. The company allows managers in the various departments to acquire supplies, furniture, equipment and other required items on a needs basis. The purchasing process begins when a requisition order is prepared by the department. The purchasing manager receives the requisition and inserts the name and number of a suitable vendor and the estimated cost of the item. The purchasing...
Alabama Company makes and sells electric fans. Its manufacturing factory in Mainland China utilizes around 90%...
Alabama Company makes and sells electric fans. Its manufacturing factory in Mainland China utilizes around 90% of its production capacity. Its Hong Kong selling office distributes the electric fans only to local wholesalers. Traditionally, the company’s sales have been in the following categories: 25% cash sales; and around 75% sales on account (due in 60 days). Uncollectible accounts expense was approximately 1% of net sales. With these policies, Alabama earned a modest profit, and monthly cash receipts exceeded monthly cash...
Here’s what happened at ACME Manufacturing Company*: ACME makes shock absorbers for the Mercedes manufacturing facility...
Here’s what happened at ACME Manufacturing Company*: ACME makes shock absorbers for the Mercedes manufacturing facility and for a few other customers. Two days before the auditors arrived to count ending inventory, the plant manager told the warehouse employees to load four tractor trailers with shock absorbers, lock them and park the trailers on the back lot.   After giving those instructions she said: “If anyone mentions this to the auditors, I will find out who you are and fire you!”  ...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT