Assume Domino's Pizza has the following monthly revenue and cost functions: Total Revenue= $10.00x Total Cost=...

Assume Domino's Pizza has the following monthly revenue and cost functions:

Total Revenue= $10.00x Total Cost= $16000+$4.00x

a. Prepare a graph illistrating Domino's cost-volume-profit relationship. The vertical axis should range from $0 to $72,000, in increments os $12,000. The horizontal axis should range from 0 units to 6,000 units, in increments of 2,000 units.

b. Prepare a graph illustrating Domino's profit-volume relationship. The horizontal axis should range from 0 units to 6,000 units, in increments of 2,000 units.

c. When is it most appropriate to use a profit-volume graph?

Solutions

Expert Solution

(c) Point (b) is appropriate to show the profit volume garph. It shows whenever we increase volume profit will increase sharply. Graph in point (a) appropriate where company is working at very low margin and there is chances in reduction of profit or working at break even point.

ekkarill92 answered 8 months ago

Next > < Previous

Related Solutions

For the following total revenue and total cost functions of a firm: TR = 802.5Q –...

For the following total revenue and total cost functions of a firm: TR = 802.5Q – 10Q2 TC = (2/3)Q3 -30Q2 + 672Q +4000 Determine the level of output at which the firm maximizes total profit Calculate the profit (20 points) Reference problem on pp. 104-106 and graphs on p. 77. Solution writes a total profit equation (TR equation minus the TC equation and simplify) and takes its derivative to get a marginal profit equation. If you set the marginal...

Suppose that a price-setting firm has the following total revenue and total cost functions: R(q) =...

Suppose that a price-setting firm has the following total revenue and total cost functions: R(q) = 10.75q – 0.1875q2 and C(q) = 75 + 0.07q + 0.035q2 . This firm faces downward sloping demand and marginal revenue curves. Marginal revenue and marginal cost are given by ?? ?? = ??(?) = 10.75 – 0.375? and ?? ?? = ??(?) = 0.07 + 0.07?, respectively. a. Using the marginal revenue function given above, find an expression for the firm’s demand curve...

2. For the following total revenue and total cost functions of a firm: TR = 800Q...

2. For the following total revenue and total cost functions of a firm: TR = 800Q – 10Q2 TC = (2/3)Q3 -30Q2 + 672Q +4000 (a) Determine the level of output at which the firm maximizes total profit (b) Calculate the profit (need step by step, please)

Assume a profit maximizing monopolist faces the following demand, marginal revenue and cost functions:

Assume a profit maximizing monopolist faces the following demand, marginal revenue and cost functions: Demand: P = 400 - 50Q Total Cost: TC = 100Q Marginal cost MC = 100 Marginal Revenue MR = 400 – 100Qa) Find the profit maximizing output level for the monopolist.b) At this level of output what price will the monopolist charge?c) What is the total profit for the monopolist?d) If the monopolist were a revenue maximizer instead of a profit maximizer, what would be...

Estimated total time cost and total revenue functions: TTC = 120 + 2N + 0.0067N3 and...

Estimated total time cost and total revenue functions: TTC = 120 + 2N + 0.0067N3 and TTR = 120 + 0.6N2 – 0.02N3 where N is time in ten-day feeding units. Profit = TTR - TTC a. Calculate Profit maximizing N b.Find Average profit c. Average profit maximizing N

A firm in a competitive industry has the following total and marginal cost functions: ? =...

A firm in a competitive industry has the following total and marginal cost functions: ? = ?? + ?? + ?? ?? = ? + ?? Suppose that the current market price is $20 and the firm is producing 8 units of output. a. Is the firm maximizing profit? If not, at what quantity should the firm produce in order to maximize profits? b. Write down the following cost functions for this firm: i. Variable Cost ii. Fixed Cost iii....

Complete the following cost and revenue schedule. Price Quantity Demanded Total Revenue Marginal Revenue Total...

Complete the following cost and revenue schedule. Price Quantity Demanded Total Revenue Marginal Revenue Total Cost Marginal Cost Average Total Cost 200 0 240 180 10 360 160 20 500 140 30 660 120 40 840 100 50 1040 80 60 1260 60 70 1500 40 80 1760 20 90 2040 a. At what rate of output are profits maximized within this range? b. What are total profits at that output rate?

The revenue and cost functions for a particular product are given below. The cost and revenue...

The revenue and cost functions for a particular product are given below. The cost and revenue are given in dollars, and x represents the number of units . R(x) = −0.8x2 + 704x C(x) = 264x + 57120 (a) How many items must be sold to maximize the revenue? ________________ (b) What is the maximum revenue? ________________ (c) Find the profit function. P(x) = ___________ (d) How many items must be sold to maximize the profit? _______________ (e) What is...

Suppose that a given firm has the following total cost and marginal cost functions: C(q) =...

Suppose that a given firm has the following total cost and marginal cost functions: C(q) = 50+5q+ 5q 2 , MC(q) = 5+10q. 2 (a) Write down expressions for the fixed cost, average fixed cost, average total cost and average variable cost associated with this production function. In addition, identify the quantity at which average total cost is minimized. (b) Consider the restaurant industry. Provide an example of a fixed cost, variable cost, and sunk cost. Be sure to justify...

The difference between total revenue and total cost is: marginal revenue. nominal revenue. average revenue. economic...

The difference between total revenue and total cost is: marginal revenue. nominal revenue. average revenue. economic profit or loss. Total revenue is a firm's: difference between revenue and cost. ratio of revenue to quantity. change in revenue resulting from a unit change in output. total output times the price of that output

Subjects