Q: Best Orange Juice Company is located in Oman. The cost function for total orange juice production…
A: Profit maximization is either the short run or long run process by through which a firm might…
Q: Best Orange Juice Company is located in Oman. The cost function for total orange juice production…
A: From total cost function: MC = dC(q)/dx = 0.5x = 0.5xs + 0.5xm [since x = xs + xm] In Muscat, from…
Q: Select choices which are true about Marginal Costs. (Select all that apply.) (change in Total Cost)…
A: Marginal cost is that cost which is incurred when one additional unit of output is produced.
Q: Explain the advantages and drawbacks of using incrementalcost pricing rather than full-cost pricing.
A: Incremental Cost Pricing: The incremental cost pricing method attempts to use the directly…
Q: Leisure Enterprise's total cost of producing speedboats is given by TC = 10Q3 - 4Q2 + 25 Q +500 (MC…
A: The difference in total production costs caused by creating or producing one extra unit is known as…
Q: As quantity increases, a firm's average fixed costs will always....
A: average fixed cost (AFC) is defined as the fixed costs of production (FC) divided by the quantity…
Q: What are the determinants of the relationship between economies of scale and market structure.
A: We are going to discuss the definition of economies of scale and market structure to answer this…
Q: 40. T-Shirt Profit The latest demand equation for your Yoda vs. Alien T-shirts is given by q = -40x…
A: Demand function: q=-40x+600 Total Cost=Fixed Cost+Variable Cost Fixed Cost=$400 Variable cost=$5x…
Q: What is the difference between a price analysis and a cost analysis
A: The Price Analysis and Cost Analysis are both methods to estimate the costs of a project. But the…
Q: Explain why automobile manufacturers produce their own engines but purchase mirrors from independent…
A: The automobile manufacturers produce their own engines but purchase mirrors from independent…
Q: Use the table below to answer the following questions. b) Determine the minimum profit for…
A: Definition: Minimum profit is determined likewise to the exchanging benefit equation in ch6. Ch7…
Q: The Marginal Cost curve will a. cut ATC at the minimum of ATC but cut AVC at a point to the…
A: Marginal cost: Minimal expense speaks to the gradual costs brought about while creating extra units…
Q: When price is _______ average cost of production, profits are ______ due to ________ averate…
A: Introduction this topic is related cost of production
Q: Which is the first-order condition for the profit of a firm to be maximum?
A: Profts are the excess of revenues over the costs incurred by the firm. Revenue represents the income…
Q: Refer to the figure below. Assuming the firm chooses the level of output that maximizes profit, what…
A: ‘Total cost’: ‘Total cost’ is the amount that includes all the expenses that are paid to produce a…
Q: Profit is maximum when Distance between TR and TC is maximum
A: The firm has objective to maximize the profit level. Some firms might have different objectives over…
Q: Best Orange Juice Company is located in Oman. The cost function for total orange juice production…
A: Profit maximizing quantity is where marginal revenue (MR) equals marginal cost (MC).
Q: (i) The MC of producing a certain good is given by the following function. Determine constants A and…
A:
Q: LAC turns up at higher scale due the presence of
A: LAC that is long run average cost is the average cost with all units incurring variable costs. This…
Q: Total Revenue $5,000 per Week $2,600 per Week $2,400 per Week Total Variable Cost Total Fixed Cost…
A: Total revenue = 5000 $ Total cost = Total variable cost + Fixed cost = 2600 + 2400 = 5000 $ As the…
Q: Eighty percent of all navel oranges grown in the US come from California. In the winter of 1998 a…
A: When there is a change in the price of a good, then the quantity supplied of that good changes. It…
Q: Urban Decay Cosmetics produces q units of setting sprays and their short-run total cost is given by…
A: ATC=TC/Q
Q: A store estimates is customer inverse demand is P= 6.1 - 2.6Q, and the marginal cost of each rental…
A: PLEASE FIND THE ANSWER BELOW. MARGINAL COST: In economics, the marginal cost of production is the…
Q: Which of the following is true? AVC=ATC+AFC. AFC will go up in the beginning but will eventually…
A: a) ATC=AFC+AVCAVC=ATC-AFC
Q: Average fixed cost decreases as quantity increases. True False
A: Total fixed cost(TFC) is the cost(C) which remains fixed in the short-run. For example: cost(C)…
Q: From a strategic standpoint, profit centers tend to:
A: Firms will always focus on profit generation.
Q: The reason the marginal cost curve eventually increases as output increases for the typical firm is…
A: Diminishing marginal refers to margin shift when input margin output decreases when input volume…
Q: maximizes net benefits?
A: Net benefit is maximized when, Marginal Revenue = Marginal Cost
Q: Matching demand with capacity is the focus of_______ management.
A: Meaning of Services: The term services are the intangible things that a firm or an organization…
Q: Price and cost (dollars per student) $150 120 - ATC - MC MR 15,000 24,000 30,000 36,000 Quantity of…
A: The maximum number of students will enroll without incurring the economic when: ATC=D This implies…
Q: TFC= Total Fixed Cost Q= Quantity of Output Marginal Cost TVC= Total Variable Cost MC = p= Product…
A: average of some cost is determined by total dividing total no. of quantity.
Q: Which one of the answers is NOT a pitfall of following an overall cost leadership strategy? TI
A: In the business procedure, cost leadership is laying out an upper hand by having the least cost of…
Q: According to the Hanson Production: Pricing for Opening Day Case Study by Peter Famiglietti, Should…
A: INTRODUCTION The leader of the production at Hanson Productions, an off-Broadway production…
Q: When you calculate marginal costs, they should include: SELECT THE CORRECT ANSWER A.the market…
A: Fixed Cost: It is the cost that is incurred for purchasing fixed factors of production. It is…
Q: |shirts. When he does this, the marginal cost of the last shirt he produces is s Musashi's profit is…
A: Key Points: Before proceeding, it is necessary to note that the given condition is of a perfectly…
Q: How does the optimal price depend on the unit cost of producing a set of clubs?
A: Optimal price is the price which maximizes the profit of the producer.
Q: Ex 3.1 Use the previous text. The general director must decide: 2000 units of product B is sold at…
A: Note: In the BNED Guidance, only the first question can be answered at a time. Resend the question…
Q: Explain the role of costs in pricing decisions and describe how various combinations of price, fixed…
A: The major costs in pricing decisions can be listed as follows: Fixed cost: Fixed costs are the costs…
Q: Explain the Envelope Theorem for unconstrained and constrained optimization. Give an economic…
A: Theorem: It refers to the research that becomes a hypothesis after several years. Any theorem is…
Q: Does providing customized products generally involve less capital investment or less skilled labor,…
A: A standardized product is a commodity where, irrespective of the entity produces the product;…
Q: Urban Decay Cosmetics produces q units of setting sprays and their short-run total cost is given by…
A: Total cost measure the cost incurred in process of production.
Q: acques's profit is maximized when he produces , which is teddy bears. When he does this, the…
A: Profit maximization is a procedure that businesses go through to ensure that they get the best…
Why is incremental cost
Step by step
Solved in 2 steps
- How does average-cost pricing differ from marginal-cost pricing?Exercise 4.6 An econometrician hired to analyse a local golf course has determined that there are two types of golfers, the regular and the occasional. The annual demand for games from regular players is given by QH = 24 – 0.3P, where P is the price of a round of golf. On the other hand, the annual demand for occasional items is given by QO = 10 – 0.1P. The marginal cost and the average total cost per item are equal to €20. a) If you could distinguish between regular and casual players, what price would be set for each type? How many games would each type of player play? How much profit could the golf course generate? Represent graphically. b) As an alternative to the discrimination of third degree prices, those in charge consider a double tranche rate according to which the members can play as many games as they wish at a price of € 20 per game. How much profit will the golf course generate if it charges all players the same annual fee for becoming a member of the club? What if you…What is the logic behind “cost plus mark up” pricing scheme? Please explain the greatest weakness of this pricing scheme?
- In a business where, fixed costs are very high (i.e. the production of a new Music CD, or the research and development of a new cancer drug) and the marginal costs are very low why can't price equal marginal cost?Assume demand is: P = 76 – Q - and total cost is: TC = 20 + Q² What is the quantity that maximizes profit? (type your answer below)Explain the significance of resource pricing.
- Describe how marginal analysis, by avoiding sunk costs, leads to better pricing decisions.Based on Zangwill (1992). Murray Manufacturing runs a day shift and a night shift. Regardless of the number of units produced, the only production cost during a shift is a setup cost. It costs $8000 to run the day shift and $4500 to run the night shift. Demand for the next two days is as follows: day 1, 2000; night 1, 3000; day 2, 2000; night 2, 3000. It costs $1 per unit to hold a unit in inventory for a shift. a. Determine a production schedule that minimizes the sum of setup and inventory costs. All demand must be met on time. (Note: Not all shifts have to be run.) b. After listening to a seminar on the virtues of the Japanese theory of production, Murray has cut the setup cost of its day shift to $1000 per shift and the setup cost of its night shift to $3500 per shift. Now determine a production schedule that minimizes the sum of setup and inventory costs. All demand must be met on time. Show that the decrease in setup costs has actually raised the average inventory level. Is this…The marginal cost pricing model calculates a markup over marginal costs using estimates of the price elasticity of demand. Will any other pricing strategy result in higher profits?
- Distinguish between technical efficiency and economic efficiencyHow sustainable is any competitive advantage for Upscale Markets? If some giants such as Amazon or Walmart enter the e-market. groceryAn airline is selling tickets for a flight from London to Frankfurt. The price of an economy class ticket three months before the flight date was £30. The price of the same ticket one day before the flight is £300. Your friend, who knows you have studied Industrial Organization, asked you to explain why there’s this difference in price.