M.P. VanOyen Manufacturing has gone out on bid for a regulator component. Expected demand is 725 units per month. The item can be purchased from either Allen Manufacturing or Baker Manufacturing. Their price lists are shown in the table Ordering cost is $55, and annual holding cost per unit is $4
Allen Mfg. | Baker Mfg. | ||
Quantity | Unit Price | Quantity | Unit Price |
1-499 | $16.00 | 1-399 | $16.10 |
500-999 | 15.50 | 400-799 | 15.60 |
1000+ | 15.00 | 800+ | 15.10 |
a) What is the economic order quantity if price is not a consideration?
b) Which supplier, based on all options with regard to discounts, should be used?
In: Other
When price exceeds average variable cost in the short run, a competitive firm's marginal cost curve is regarded as its supply curve because
| a. the position of the marginal cost curve determines the price for which the firm should sell its product. |
| b. among the various cost curves, the marginal cost curve is the only one that slopes upward. |
| c. the marginal cost curve determines the quantity of output the firm is willing to supply at any price. |
| d. the firm is aware that marginal revenue must exceed marginal cost in order for profit to be maximized. |
In: Economics
Give the data:
Cost of equity: 5%
Cost of debt: 7%
%debt: 60%
%Equity: 40%
what is the weighted average cost of capital of this company?
A: 3.7%
B: 5.9%
C: 6.2%
D: 4.0%
In: Finance
Suppose Dan's cost of making pizzas is
C(Q)=6Q+(Q2/160),
and his marginal cost is
MC=6+(Q/80).
Dan is a price taker. If Dan's avoidable fixed cost increases from
$10 to $250, how will his supply function change?
a. What is Dan's supply function with fixed costs of $10?
| Q = 80P - 480 if P ≥ 6.5. | |
| Q = 160P + 480 if P ≥ 6. | |
| Q = 80P - 80 if P ≥ 6.5. | |
| Q = 80P + 480 if P ≥ 6. | |
| Q = 80P - 160 if P ≥ 6.5. |
b. What is Dan's supply function with fixed costs of
$250?
| Q = 80P - 480 if P ≥ 40. | |
| Q = 80P - 480 if P ≥ 6.5. | |
| Q = 80P + 480 if P ≥ 200. | |
| Q = 80P + 480 if P ≥ 6. | |
| Q = 80P - 480 if P ≥ 8.5. |
In: Economics
Write a short journal that addresses the following concepts: incremental cash flow; sunk cost; opportunity cost; externality ; cannibalization; stand-alone risk; sensitivity analysis; base-case NPV; scenario analysis; base-case scenario; worst-case scenario; best-case scenario.
In: Finance
The most important measure for controlling digital media investments is
|
Cost per thousand impressions (CPM) |
||
|
Cost per click (CPC) |
||
|
Cost per acquisition (CPA) |
||
|
Cost per lead (CPL) |
||
|
Cost per sale |
In: Economics
If a regulatory authority requires a decreasing-average-cost natural monopoly to charge its average cost and produce the quantity demanded at that price, the monopolist will likely not be able to cover all of its economic costs (including opportunity costs).
In: Economics
Landed cost calculation You have been asked to calculate the landed cost for two apple producers. Farm A, can produce apples for $25 per bushel. Farm A has a fixed transportation cost of $0.50/unit/mile. Farmer B can produce their apples for $20/bushel but has higher transportation cost of $0.60/unit/mile. For this example, there are no other cost. Knowing this information calculate the following: What is the landed cost per unit for each of the products if their main market is 40 miles away
Farmer A =
Farmer B =
In: Operations Management
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost curve for its product:
Q = 200 - 2P MR = 100 - Q TC = 5Q MC = 5
a) suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing level of output?
b) suppose that a tax of $5 for each unit produced is imposed by state government. What is the price maximizing price?
In: Economics
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost curve for its product: Q = 200 ; MR = 100-Q ; TC = 5Q ; MC = 5
a) Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing level of output?
b) Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing price?
c) Suppose that a tax of $5 for each unit produced is imposed by state government. How much profit does the monopolist earn?
In: Economics