The total fixed cost is $60 per month. (a) If the price per visit is $60, at what level of visits will the maximum profit position be? (b) What are the profits at this level?(c) What is the quantity supplied? (d) If the total fixed cost increases to $80 and the price per visit is $60, what is the quantity supplied (assuming maximizing profits)?
quantity per visits supplied:1,2,3,4,5,6,
total variable cost: 20,50,90,140,210,290
In: Economics
| Cori's Meats is looking at a new sausage system with an installed cost of $520,000. This cost will be depreciated straight-line to zero over the project’s five-year life, at the end of which the sausage system can be scrapped for $78,000. The sausage system will save the firm $200,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $37,000. If the tax rate is 23 percent and the discount rate is 8 percent, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
In: Finance
The marginal benefit of an additional beach towel is $10. The marginal cost of producing an additional beach towel is $10. If producers are not minimizing the average costs of production, then we can conclude:
beach towel production is neither allocatively nor productively efficient.
beach towel production is allocatively efficient but not productively efficient.
beach towel production is not allocatively efficient but is productively efficient.
beach towel production is both allocatively and productively efficient.
In: Economics
What effect does the increase of the price of gasoline have on the cost curves of package delivery firms such as Federal Express or United Parcel Service? Which cost curves will this price change impact and in what direction will they shift? For an extra point draw the original curves and indicate the shift.
In: Economics
Which of the following statements is correct for a given company?
a.The cost of equity is greater than the cost of debt.
b.The WACC is greater than the cost of equity.
c.The cost of retained earnings exceeds the cost of new common
stock.
d.The WACC is not affected by taxes.
In: Economics
Use the values in the table below to answer the following questions.
Q | TC | ATC | MC |
2 | |||
5 | -( A)- | ||
6 | -( B)- | -( C)- | |
19 | |||
20 | -( E)- | -( D)- |
Cell (A) stands for the total cost of 5 units. Its value should be
____.
| A. | ||
| B. | ||
| C. | ||
| D. |
In: Economics
In this module we learned that, despite increases in the cost, the value of higher education has increased over time. How can college be made more affordable? Revenues earned by colleges and universities come from three main sources: Tuition and fees paid by students, which have increased faster than the cost of living. Support from governments at the federal, state and local levels. This support is paid for through tax revenues. Even private colleges and universities obtain funding from the government, but government support has declined at all levels in recent years. Alumni contributions. What has caused the cost of college to increase so much? (Not every college has a fancy gym or an Olympic sized pool with a lazy river.) What features of your college education would you be willing to do without to make college more affordable? What do you propose should be done to make higher education more affordable? What reasons can you provide to support your argument? (200 words minimum)
In: Economics
Explain the concept of opportunity cost and the Law of Diminishing Returns. How are they related? Why economists use the concept of opportunity cost when they want to determine cost rather than the traditional view of cost, i.e., cost out of pocket? Illustrate with an original and relevant example these concepts and how they are related.
In: Economics
The price of a floor tile is $3 per square foot, and the cost of shipping is $20. You are adjusting the size of your bathroom according to the space availability. You would like to estimate the rate of change of cost for flooring that you expect when you change the size of the square bathroom of current length 10 feet. Assume x to be the length of a square shaped bathroom.Include units in all parts.
a. Calculate the average rate of change of cost when you change your bathroom from 10 feet to 12 feet long.
b. Calculate the instantaneous rate of change of cost at length 10 feet.
c. If the cost of shipping also depends on the length according to $20(1+sinx), what is the instantaneous change of cost at length 10 feet.
In: Economics
The demand function for iPhone is Q(p) = 100 – P and the cost function is C(Q) = 5Q. Apple initially sets the price of iPhone to be p1; after one-year Apple lowers the price to p2. Suppose the price decrease is not anticipated by the consumers. The number of consumers buying the iPhone at p1 is q1, and the amount buying at p2 is q2, where q1=Q(p1) and q1+q2=Q(p2). Find the profit-maximizing p1 and p2 and the corresponding q1 and q2 as well as the consumer’s surplus and Apple’s profit. This is form of second-degree price discrimination.
In: Economics