BUSN 661 WEEK 1 DATA SET DISCUSSION PROBLEMS
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Feb 20, 2024
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14.
The impact of fluctuations in sales volume on profitability.
The phenomenon of an increase in sales volume is accompanied by a corresponding increase in total income. Nevertheless, the potential rise in variable costs resulting from an escalation in output may not show a substantial size. Consequently, profits will grow more rapidly than sales volume.
The decline in sales volume results in a corresponding fall in overall revenue and profit. Nevertheless, the influence on variable costs may not be as large, resulting in a comparatively lesser decline in profitability or a fall in sales volume.
The impact of simultaneous changes in sales volume and variable cost.
Increased sales volume and lower variable costs: This situation provides Julie with a twofold advantage. Raising sales volume increases revenue and lowering variable costs lowers manufacturing costs. Consequently, there is a notable augmentation in financial gain.
A drop in sales and an increase in variable costs would be Julie's worst-case scenario. A lower sales volume means less money coming in, and higher variable costs mean more money going into production. Consequently, there is a notable reduction in profitability, which may result in financial losses.
Question: 15 DATAWARE
Sales Growth Ambiguity:
Dataware does not have correct data about the specific size of the sales growth resulting from the refund or reduction in pricing. Nevertheless, they express a strong belief that the refund will result in a sales boost ranging from 15% to 40%, while the price reduction is expected to range from 10% to 30%.
Making decisions in the face of uncertainty:
Given the lack of confidence, Dataware must evaluate many possibilities and carefully assess the possible
risks and benefits associated with each alternative. One can do a sensitivity analysis to examine the impact of varying sales increases on profit, considering both the refund and price reduction.
In addition, they can consider considerations other than profit, such as:
Views from customers: Will they think that a rebate is better than a price reduction? Effect on Public Perception: Which choice is more consistent with the brand's ideals and public feeling? Competitive landscape: competitors are employing What pricing and promotional strategies? With this information in
hand, Dataware may decide with confidence whether to supply a discount, a rebate, or no change at all.
Question 16.
Profit Model and Maximization
a. Profit Model:
1.
Revenue:
o
Price per unit in pounds (p) * Number of units sold (q)
o
q = 27556759 * p^ (-2.4) (demand function)
o
Revenue = p * 27556759 * p^ (-2.4)
2.
Cost:
o
Unit cost in dollars ($50) * Number of units sold (q) * Exchange rate (r)
o
Cost = 50 * q * r
o
Cost = 50 * 27556759 * p^ (-2.4) * r
3.
Profit:
o
Revenue - Cost
o
Profit = p * 27556759 * p^ (-2.4) - 50 * 27556759 * p^ (-2.4) * r
Question 17
The yield is positively correlated with both temperature and time.
The best yield is achieved at a temperature of 150°F and a duration of three hundred seconds.
The outcome of this configuration is a yield of 126.48%.
Hence, a temperature of 150°F and a duration of three hundred seconds perfect the output of the chemical process.
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Related Questions
48. Whenever there is an improvement in the technology, the supply of the products using that technology will__________.
a.
Decrease
b.
None of these.
c.
Remain the same
d.
Increase
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7) Refer to Figure 13-15 to answer the following questions.
What is the profit-maximizing output level?
What is the profit-maximizing price?
What is the average total cost at the profit-maximizing output level?
What area represents the firm's profit?
At which output level are economies of scale exhausted?
Does this graph most likely represent the long run or the short run? Why?
arrow_forward
8. Critical analysis Q13
Suppose Raphael, the owner-manager of a local hotel, projects the following demand for his rooms:
Price
Quantity Purchased
($)
(per Day)
90
200
135
180
180
140
The price elasticity of demand between $90 and $135 is_____ in absolute value. This means that if Raphael raises the price from $90 to $135, his total revenue will______ (rise/fall/constant).
The price elasticity of demand between $135 and $180 is______ in absolute value. This means that if Raphael raises the price from $135 to $180, his total revenue will_________(rise/fall/constant) .
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Peloton article:
Why do you think Peloton simultaneously raised subscription rates while lowering the price of the hardware (the bike)?
Group of answer choices
Their instructors threatened to go on strike.
Their raw material costs went down.
They know they have existing customers locked in (due to transaction specific investments), so they are holding them up while trying to attract new customers.
arrow_forward
7
With the aid of a diagram, explain the profit maximising rule and explain four reasons why firms aim to profit maximise.
Why might profit maximisation not be possible? (At least three developed points)
What other business objective, besides profit maximisation may firms have and why might this be the case?
Use a diagram and develop at least three points
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Only typed answer and please answer correctly
It is possible to lower the average cost of production by expanding output beyond Q0 to Q1. Why wouldn't a firm expand its output to Q1?
Group of answer choices
a) Demand is not sufficient for consumers to buy Q1.
b) The firm would suffer an economic loss at Q1 while it would break even at Q0.
c) The firm's marginal revenue would be negative at Q1.
d) The firm wants to maximize accounting profit rather than economic profit.
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4.
Continuing with the Table of Certificate Programs, complete the calculations for Total Revenue by determining how many customers will purchase at each of the segment's bundle price.
Online Self Certifications for Social Work License
Certification in Online Counseling
Certification as a Group Home Counselor
Bundle
Customers
TR Counseling
TR Group Home
TR Bundle
Segment 1
1000
$190
a
$70
e
$260
4a
Segment 2
1000
$150
b
$90
f
$240
4b
Segment 3
1000
$95
c
$160
g
$255
4c
Segment 4
1000
$35
d
$195
h
$230
4d
4a) 4b) 4c) 4d)
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Figure 7.1 shows a firm’s total revenue and total cost curves. If the firm were producing Q1, it should
a. expand output to Q2 to maximize profit.
b. reduce output to zero to maximize profit.
c. expand output to Q3 to maximize profit.
d. expand output beyond Q3 to maximize profit.
e. continue to produce Q1, which is the profit-maximizing output.
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5. Study Questions and Problems #5
Suppose there is a decrease in the demand for high-definition televisions.
What effect might this change have on the short-run average total cost curve for this product? _____
a) A decrease. When demand decreases, the short-run average total cost falls.
b) An increase. When demand decreases, the short-run average total cost increases.
c) No change. Demand determines the final price but not the costs for the product.
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15. Please select all that are true regarding variable costs (VC):
Variable costs must be more than revenue for profitability
Variable costs per unit are assumed to be constant in the relevant range of output
Total variable costs are from all Q produced
Variable costs are the total cost of producing a good or service
Variable costs change over time
Variable costs are assumed to be proportionate to Quantity
Variable costs are the marginal profit per unit
Variable costs are less of a risk than fixed costs since FC remain even at zero Q
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question7)
the following is the total cost function and demand function of a certain firm
TC= 100 +20Q + 7QQd = 130-2Pa)- What is the type of this market? why?
b)Calculate the profit maximizing level of output and price for this firm.
c) Does the firm make profit or loss at this level of output? Why?
d)Should the firm produce this level of output or shut down? Why?
please all do subparts because I have very urgent solution
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22. Which one of these will continuously increase as more products are produced?
a.
None of the choices
b.
Variable cost
c.
Average fixed cost
d.
Fixed cost
arrow_forward
33 -
Which of the following will maximize profit?
a)
MR=TC
B)
MR=AC
C)
MC=TC
D)
MC=AC
TO)
MC=MR
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13. How can you calculate Total Revenue? What is the formula?
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1- You own a hamburger franchise and are planning to shut down operations for the day, but you are left with 12 buns, 18 defrosted beef patties, and 14 opened cheese slices. Rather than throw them out, you decide to use them to make burgers that you will sell at a discount. Plain burgers each require 1 beef patty and 1 bun, double cheeseburgers each require 2 beef patties, 1 bun, and 2 slices of cheese, while regular cheeseburgers each require 1 beef patty, 1 bun, and 1 slice of cheese. How many of each should you make?
plain burgers
double cheeseburgers
regular cheeseburgers
2-
The Enormous State University History Department offers three courses—Ancient, Medieval, and Modern History—and the chairperson is trying to decide how many sections of each to offer this semester. The department is allowed to offer 48 sections total, there are 5,400 students who would like to take a course, and there are 65 professors to teach them. Sections of Ancient History have 100 students each,…
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QUESTION 2
Mrs Tobani who was earning an annual income of K4,000 decided to go into business in 2014 by investing his capital which was earning a return of K2,400. In 2014 his accounting profit was K6,000.
Calculate:
-Mrs Tobani’s total opportunity cost. -His economic profit.
- A retail store conducted a study of the demand for trousers. It found that the average daily demand (Q) in terms of price (P) is given by the equation.Q = 700 – 5P
-How many trousers per day can the store expect to sell at a price of K100 per trouser?
-If the store wants to sell 1000 trousers per day, what price should it charge?
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4. If Stopdecay does not change its price, the average monthly total revenue would be (Dropdown options: 240k, 195k, 200k, 162,500)
5. On the other hand, if it changes the price to sell the same number of units as it did before, the average monthly total revenue would be (Dropdown options: 231,920 or 241,440, or 160,000 or 172,480)
arrow_forward
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- 48. Whenever there is an improvement in the technology, the supply of the products using that technology will__________. a. Decrease b. None of these. c. Remain the same d. Increasearrow_forward7) Refer to Figure 13-15 to answer the following questions. What is the profit-maximizing output level? What is the profit-maximizing price? What is the average total cost at the profit-maximizing output level? What area represents the firm's profit? At which output level are economies of scale exhausted? Does this graph most likely represent the long run or the short run? Why?arrow_forward8. Critical analysis Q13 Suppose Raphael, the owner-manager of a local hotel, projects the following demand for his rooms: Price Quantity Purchased ($) (per Day) 90 200 135 180 180 140 The price elasticity of demand between $90 and $135 is_____ in absolute value. This means that if Raphael raises the price from $90 to $135, his total revenue will______ (rise/fall/constant). The price elasticity of demand between $135 and $180 is______ in absolute value. This means that if Raphael raises the price from $135 to $180, his total revenue will_________(rise/fall/constant) .arrow_forward
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- 4. Continuing with the Table of Certificate Programs, complete the calculations for Total Revenue by determining how many customers will purchase at each of the segment's bundle price. Online Self Certifications for Social Work License Certification in Online Counseling Certification as a Group Home Counselor Bundle Customers TR Counseling TR Group Home TR Bundle Segment 1 1000 $190 a $70 e $260 4a Segment 2 1000 $150 b $90 f $240 4b Segment 3 1000 $95 c $160 g $255 4c Segment 4 1000 $35 d $195 h $230 4d 4a) 4b) 4c) 4d)arrow_forwardFigure 7.1 shows a firm’s total revenue and total cost curves. If the firm were producing Q1, it should a. expand output to Q2 to maximize profit. b. reduce output to zero to maximize profit. c. expand output to Q3 to maximize profit. d. expand output beyond Q3 to maximize profit. e. continue to produce Q1, which is the profit-maximizing output.arrow_forward5. Study Questions and Problems #5 Suppose there is a decrease in the demand for high-definition televisions. What effect might this change have on the short-run average total cost curve for this product? _____ a) A decrease. When demand decreases, the short-run average total cost falls. b) An increase. When demand decreases, the short-run average total cost increases. c) No change. Demand determines the final price but not the costs for the product.arrow_forward
- 15. Please select all that are true regarding variable costs (VC): Variable costs must be more than revenue for profitability Variable costs per unit are assumed to be constant in the relevant range of output Total variable costs are from all Q produced Variable costs are the total cost of producing a good or service Variable costs change over time Variable costs are assumed to be proportionate to Quantity Variable costs are the marginal profit per unit Variable costs are less of a risk than fixed costs since FC remain even at zero Qarrow_forwardquestion7) the following is the total cost function and demand function of a certain firm TC= 100 +20Q + 7QQd = 130-2Pa)- What is the type of this market? why? b)Calculate the profit maximizing level of output and price for this firm. c) Does the firm make profit or loss at this level of output? Why? d)Should the firm produce this level of output or shut down? Why? please all do subparts because I have very urgent solutionarrow_forward22. Which one of these will continuously increase as more products are produced? a. None of the choices b. Variable cost c. Average fixed cost d. Fixed costarrow_forward
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Recommended textbooks for you
- Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage LearningPrinciples of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Essentials of Economics (MindTap Course List)
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ISBN:9781337091992
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Publisher:Cengage Learning
Principles of Economics 2e
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