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- Nik is a company that manufactures running shoes. It has a fixed cost of $300,000.00. Additionally, it costs $30 to produce each pair. They are sold at $80 a pair. A.Write the cost function, C, of producing x running shoes. B.Write the revenue function, R, from the sale of x running shoes. C.Suppose Nik produces too many running shoes- more than they can sell in the stores. How would this impact profits? Is there anything the managers can do to cut their losses? D.Suppose that we can sell all of the units that we produce. How many running shoes would Nik have to produce/sell in order for the company to make a profit? E.Determine the break-even point. Describe what this means. Graph the lines with at least three points each.Bill Prichett’s store makes and sells small pottery items which are sold at $10 per item. Fixed cost for the store is $1000 and the variable cost per item is $5. (a) Find the break-even quantity. (b) How many items should the store make to realize a profit of $25000? revenue of $25000? (c) What is the break-even quantity if Bill wants to earn a salary of $15000?5. A good salesperson can sell $4,000,000 worth of goods, while a poor one can sell only $3,000,000 worth of goods. Job applicants know if they are good or bad, but the fim does not. A fim will offer job applicants a choice between a fixed salary or 25% commission. Assuming risk-neutral salespersons and no opportunistic behavior, what level must the fixed salary be so that the fim can distinguish a prospective good salesperson from a poor one, and thereby avoid hiring a poor one?
- 4. Jose’, store manager for SportsHaven, does not know how to price a GE freezer that cost the store $580. Jose’ knows his boss wants a 25% markup on selling price. How much should Jose’ price the freezer?Columbus Inc. sells a high end hair dryer in a super competitive marketplace. As a result, market research and competitive pressures influence the determination of their selling price. Their marketing department has done a comprehensive analysis and It looks like a price of $61 would be appropriate given the present business environment. The company has a goal of earning $30 on each unit. What is the target unit cost of each hair dryer? Enter your answers without dollar signs or commas. ASUS 13 f4 E3 X 19 OLF 11 (12 3. & 4. 5 7. 8. E T. Y. F G H K t6 立In response to customer complaints about rising prices of food items, a supermarket responds by making the following offer: For every $10 of purchase, the customers will earn $1 worth of coupons and this way they will end up making twice as much as the supermarket. If the supermarket makes $500 worth of total sales to all customers taken together, how much will it need to restrict its costs to so as to honour the offer?
- Ingrid is planning to expand her business by taking on a new product that costs $7.56. In order to market this new product, $1307.00 must be spent on advertising. The suggested retail price for the product is $11.31. (a) If a price of $14.49 is chosen, how many units does she need to sell to break even? (b) If advertising is increased to $1674.00, and the price is kept at $11.31, how many units does she need to sell to break even?Night Shades Inc. (NSI) manufacturers biotech sunglasses. These sunglasses sell for $150 each, and cost $70 each to produce. Night Shades Inc. has fixed costs of $100,000.a. Calculate Night Shades' Breakeven point.b. how much profit (loss) will Night Shades have if it sells 500 sunglasses? 4,000 sunglasses?c. Night Shades' manager expects an operation profit of $200,000. How many sunglasses must be sold to attain this profit?A local pizza shop owner decides to hire an economic consultant to help him set his prices. Currently, one slice of pizza costs $2 and the store sells about 800 slices per week. The pizza shop's current revenue from sales is equal to $____. The economic consultant estimates that the price elasticity of demand is equal to -0.25, and suggests that the shop owner should increase the price of a slice of pizza by $0.50; that is, the consultant recommends increasing the price of pizza by ____%. The consultant claims that doing so would (a. Increase b. Decrease or C.have no effect on)_____ the number of slices sold by ____% or ____ slices. As a result, the economist predicts that the new revenue would be ____ Thus as a result of the increase in the price there is ____ in revenue. This is due to the fact that the pizza shop owner was operating on the ____ portion of the demand curve. (fill in the blanks)
- Your store sells notebooks at P80.00. You make 7% profit on these items. The product has not been selling well and you are considering having a promo. If running a promo event costs you P800.00 to implement, and you'd like to offer the merchandise at P76.00, how much do you have to sell to break even?A company sells a pizza for an average price of $20. They estimate that the cost of the material and labor to make one is $4. What is the gross profit margin for one pizza? 0.2 5 0.8 None are correctNight Shades Inc. (NSI) manufactures biotech sunglasses. These sunglasses sell for $150 each, and cost $70 each to produce. Night Shades Inc. has fixed costs of $100,000. a. Calculate Night Shades’ Breakeven point. b. how much profit (loss) will Night Shades have if it sells 500 sunglasses? 4,000 sunglasses? c. Night Shades’ manager expects an operating profit of $200,000. How many sunglasses must be sold to attain this profit?
