Production of commercial air conditioning units

Reference no: EM13683588

Your company manufacturers controllers utilized in the production of commercial air conditioning units and currently selling them at $50 each. Marginal costs are $30 for production up to 10,000 units per month. Production cannot be pushed beyond 10,000 units per month. Is your company selling at the optimal price at which the company can maximize profits, if the price elasticity of demand is estimated to be -2 for prices among $45 and $65 per controller?

Reference no: EM13683588

Questions Cloud

The good, the bad, and the ugly : The Good, the Bad, and the Ugly

Calculate sonyas implicit costs and economic profit : Sonya used to sell real estate and earn $25,000 a year, however now she sells greeting cards. Normal profit for the retailers of greeting cards is $14,000. Sonya utilized 4,000 of her savings to start her business.

Change in preferences means in more intuitive language : Presume that the representative consumer’s preferences change, in that his/her marginal rate of substitution of leisure for consumption increases for any quantities of leisure and consumption. Describe what this change in preferences means in more in..

Coca-cola company decided to start marketing coke zero : If the Coca-Cola Company decided to start marketing Coke Zero as a drink for middle-aged women, then they would be repositioning it.

Production of commercial air conditioning units : Your company manufacturers controllers utilized in the production of commercial air conditioning units and currently selling them at $50 each. Marginal costs are $30 for production up to 10,000 units per month. Production cannot be pushed beyond 10,0..

What is the expected effect of the merger : Effects of Collusion or Merger - In the three bidder auction, Presume that bidders two and three collude or merge. What is the expected effect of the merger?

How did this affect decision made-what were the consequencs : Opportunity cost is one of the cornerstones of managerial economics and the decision making. First, provide your own explanation of dissimilarity between opportunity and accounting cost, and accounting and economic profits. Then, please provide an ex..

Electrical and electronics engineering : What is Main Difference b/w Electrical and Electronics Engineering?

What are the limitations of supply and demand analysis : Describe the laws of Demand and Supply; distinguish among shifts in each, from a movement along its curve, then explain how the laws of demand and supply generate equilibrium. What are the limitations of supply and demand analysis?

User Account

All Pages