Question

In: Economics

Executives of a bread company decide to add a new line of whole wheat bread. Research...

Executives of a bread company decide to add a new line of whole wheat bread. Research indicates that consumers will buy about 700 loaves at $1.95 a loaf and 1,100 at $1.60 a loaf. The company can supply 450 loaves at $1.65 per loaf and 1,250 loaves at $1.92 per loaf. Furthermore, the baking staff reports that it costs $270 for 850 loaves and $555 for 2,200 loaves. Let the input be p, price per loaf, and the output be q, number of loaves.


(a) What is the demand equation,
D(p)?
(Round all numerical values to two decimal places.)

(b) What is the supply equation,
S(p)?
(Round all numerical values to two decimal places.)

(c) Find the market equilibrium price and quantity. (Round your answers to two decimal places.)

(d) What is the cost equation,
C(q)?
(Round all numerical values to two decimal places.)

(e) What is the cost equation,
C(p)?
(Round all numerical values to two decimal places.)

(f) What is the revenue equation,
R(p)?
(Round all numerical values to two decimal places.)

(g) What is the profit equation
P(p)?
(Round all numerical values to two decimal places.)

(h) Find the break-even price(s) only, not the quantities. (Enter your answers as a comma-separated list. Round your answers to two decimal places.)

Solutions

Expert Solution

We will use equation of a line for estimating all the equations,

P - P1 = [(P2 - P1)/(Q2 - Q1)] * (Q - Q1)

a) Here, P1 = $1.95 , Q1 = 700 loaves, P2 = $1.60 and Q2 = 1100 loaves

Substituting these values in the equation of the line, we get,

P = -0.000875Q + 2.5625

=> D(P) = -1142.85P + 2928.57

This is the demand fuction, D(P)

b) Here, P1 = $1.65, Q1 = 450 loaves, P2 = $1.92 and Q2 = 1250 loaves

P = -0.0003375Q + 1.80

=> S(P) = -2963P + 5338.9

Thus, the supply function is S(P)

c) At Equilibrium, D(P) = S(P)

=> -1142.85P + 2928.57 = -2963P + 5338.9

=> P = $2.04 and D(P) = S(P) = Q = 597 units

d) Here, P1 = C1 = $270 , Q1 = 850 loaves, P2 = C2 = $555 and Q2 = 2200 loaves

C(Q) = 0.21Q + 448.5, this is the cost function.

*I am doing the first 4 parts only as you have not mentioned which prts need to be done, please reupload the parts left on the portal to get solution for them also and please specify from the next time.

*Please don’t forget to hit the thumbs up button, if you find the answer helpful.

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Track the ingestion and digestion of a ham-and-cheese sandwich on whole wheat bread with lettuce, green...
Track the ingestion and digestion of a ham-and-cheese sandwich on whole wheat bread with lettuce, green pepper, and tomatoes. Describe the fate of this sandwich from the time you eat it. Be very detailed regarding the digestive process, location, enzyme action, and use of accessory organs of digestion
Bake-Ri is a company that makes high quality whole grain bread and sell the bread to...
Bake-Ri is a company that makes high quality whole grain bread and sell the bread to the malls in JABODETABEK. In making bread, there are two departments directly involved namely Mixing and decorating, while those that help to maintain inventory and also the availability of raw materials are purchasing and storage. Of course in the making of bread many costs that arise such as direct material, direct labor, and factory overhead. Factory Overhead will be in all departments of Bake-Ri....
Bake-Ri is a company that makes high quality whole grain bread and sell the bread to...
Bake-Ri is a company that makes high quality whole grain bread and sell the bread to the malls in JABODETABEK. In making bread, there are two departments directly involved namely Mixing and decorating, while those that help to maintain inventory and also the availability of raw materials are purchasing and storage. Of course in the making of bread many costs that arise such as direct material, direct labor, and factory overhead. Factory Overhead will be in all departments of Bake-Ri....
A New York company is planning to decide about advertisements. He invites executives from a local...
A New York company is planning to decide about advertisements. He invites executives from a local newspaper, a local TV station, and a local radio station to make a presentation. The newspaper executive claims to be able to provide an audience of 10,000 customers at a cost of $4,000 per ad. The breakdown of audience: Male Female Young 2000 1000 Senior 4000 3000 The executive from the local TV station claims to provide an audience of 25,000 customers at a...
Factor Company is planning to add a new product to its line. To manufacture this product,...
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $479,000 cost with an expected four-year life and a $11,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)...
Factor Company is planning to add a new product to its line. To manufacture this product,...
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $515,000 cost with an expected four-year life and a $11,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)...
Factor Company is planning to add a new product to its line. To manufacture this product,...
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $519,000 cost with an expected four-year life and a $23,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)...
Factor Company is planning to add a new product to its line. To manufacture this product,...
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $503,000 cost with an expected four-year life and a $23,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)...
Factor Company is planning to add a new product to its line. To manufacture this product,...
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $487,000 cost with an expected four-year life and a $19,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)...
Factor Company is planning to add a new product to its line. To manufacture this product,...
Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $820,000 cost with an expected four-year life and a $54,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT