Explain how many cases of toothpaste should be produced

Assignment Help Business Economics

Reference no: EM1344861

Q1. What fiscal policies are required to fight unemployment? Which ones are required to fight inflation? What are some of the downside risks and potential problems involved when using fiscal policy?

Q2. How would a company's profitability in their toothpaste division would be impacted by an expansion. Assess the profit potential using marginal analysis.
It is assumed that the toothpaste market is perfectly competitive and the current price of a case of toothpaste is $42.00. Estimated its marginal cost function to be as follows: MC=.006Q.

1. Explain how many cases of toothpaste should be produced in order to maximize profits.

2. Illustrate what happens if its decided to raise prices unilaterally in this toothpaste market?

3. Illustrate what results from the profit maximizing level of output if the market price suddenly rose to $54 per case? Why the output level changes?

4. Would the company benefit by advertising in this perfectly competitive market?

5. What would happen to the price of toothpaste, would it rise or fall? What would happen to the profits the company makes?

Reference no: EM1344861

Questions Cloud

Explain what is the rate of return on his investment : Explain what is the rate of return on his investment, assuming yield to maturity does not change?

Hedging-selecting correct futures hedge : You're a US company with a customer that is going to pay you 10,000 Euros in six months. The correct futures hedge for this condition is to enter in a contract in which you buy Euros (True or False)

What horizontal distance from the firing point : The men's world record for the shot put, 23.12 m, was set by Randy Barnes of the United States on May 20; 1990.If the shot was launched from 6 ft above the ground at an initial angle of 42degrees, what was its initial speed.

Find what is the funds required rate of return : If the market's required rate of return is 14 and the risk-free rate is 6, what is the fund's required rate of return?

Explain how many cases of toothpaste should be produced : Explain how many cases of toothpaste should be produced in order to maximize profits. Illustrate what happens if its decided to raise prices unilaterally in this toothpaste market.

How much time does it take for package to reach the ground : A skier is accelerating down a 30 degree hill at 3.60 m/s^2. How long would it take her to reach the bottom of the hill, assume she starts from rest and accelerates uniformly, if elevation change is 170m.

Evaluate the realized rate of return for investors : Evaluate the realized rate of return for investors who purchased the bonds when they were issued and who surrender them today in exchange for the call price.

Audit-cobit methodology : How does an audit performed using CobiT methodology differ from an audit that doesn't?

Value at risk models : Value at Risk Models are used by financial institutions to estimate how much value the bank will lose if certain economic factors vary within a certain ranges.

User Account

All Pages