Reference no: EM13898373
Atrium, a manufacturer of upscale designer tee-shirts, is considering launching an Internet operation to sell its product direct to consumers in addition to distributing through traditional bricks-and-mortar retail stores. Management believes an Internet presence should augment its retail operation. Atrium tee-shirts, made of 100% refined woven cotton, feature batik prints. The cost of producing an Atrium designer tee-shirt is $6.50 per shirt.
Internet: In selling tee-shirts on the Web, the company must hire a Web page architect to design the page and maintain it over the course of a year. The salary for a Web page architect is $60,000, including expenses and benefits. Shipping on Internet orders, which is to be included in the retail price of the tee-shirts, is estimated to be $4.20 per shirt.
Retail store distribution: A retail chain has proposed to carry Atrium tee-shirts for a year in exchange for a 35% dealer margin. Additional in-store promotion and a local print advertising campaign for a year will cost Atrium $80,000.
Based on the above information, answer the following questions. Please Show Your Calculations.
1a. If Atrium can sell 10,000 tee-shirts from its Web page, what’s the break-even price?
1b. If Atrium tee-shirts sell for $32 at the retail stores, how many tee-shirts must Atrium sell to break even?
1c. The retailer can sell 5,000 tee-shirts at $40 a piece. If the retailer lowers the price to $35 a piece, he can sell an additional 1,500 tee-shirts. What is the demand elasticity?
|
Explain expected effect of grant on public safety spending
: Suppose that the city of Cool currently levies a property tax for public safety at a rate of one percent of taxable value on a base of $10 million of taxable property. If the price elasticity of demand for public safety in Cool is -0.2, calculate and..
|
|
Optimum output combination lies on this isocost curve
: The Hassman Company produces two joint products, X and Y. The isocost curve corresponding to a total cost of $500,000 is Qy = 1,000 – 10Qx – 5Qx^2. What is the optimum output of product Y? Can you be sure that the optimum output combination lies on t..
|
|
Explain advantages-disadvantages of investing in real estate
: Explain advantages and disadvantages of investing in real estate. Do tax laws seem to favor certain types of investments?
|
|
Low marginal cost of producing the product
: You are manager of a small pharmaceutical company that received a patent on a drug three years ago. Despite strongest sales(125milion last year) and a low marginal cost of producing the product ($0.25 per pill) your company has yet to show a profit f..
|
|
How many tee-shirts must atrium sell to break even
: Atrium, a manufacturer of upscale designer tee-shirts, is considering launching an Internet operation to sell its product direct to consumers in addition to distributing through traditional bricks-and-mortar retail stores. If Atrium can sell 10,000 t..
|
|
The production function for puffed rice
: The production function for puffed rice is- Calculate the Q = 1000 isoquant for this production function and show it on a graph. If K = 10, how many workers are required to produce Q = 1,000? What is the average?
|
|
Example of market failure-requires government intervention
: Write a paper of 500 words, not including the title and References page, that analyzes the need for health care reform. Include the following in your paper: Identify concerns about cost, quality, and access to the current U.S. health care system. Ans..
|
|
Do you believe that some industries are unfairly targeted
: In the land of free trade, the public does not view all industries as equal. Do you believe that is ethical? Do you believe that some industries are unfairly targeted? Become an advocate for either the consumer or the industry. Prepare an argument ex..
|
|
Portray your switching costs
: After you have been in a job for a while, you should portray your switching costs as:
|