Should computer products accept offer to supply 300000

Assignment Help Microeconomics
Reference no: EM13452966

1. Computer Products Corp. sells peripheral equipment used by both private businesses and the government. Due to a recession, Computer Product's sales have declined by 100,000 units and it now has 200,000 units of excess capacity. All of its current sales are to private sector customers and each pays $12.00 per unit for the equipment. The sales price is equal to 150% of average variable costs.  A government agency has offered to purchase 300,000 units at $10.00 each. If Computer Products accepts the offer, it will not be able to fill 100,000 units of its expected orders from private sector customers over the next few months, although the inability to meet customer demand is not expected to affect future sales.

  1. Should Computer Products accept the offer to supply 300,000 units at $10 each to the government agency? What happens to its profits if it accepts the offer?
  2. Would your answer change if the inability to meet private sector customer demand reduces sales of 50,000 during this (ignore any effects beyond this period)?

Reference no: EM13452966

Questions Cloud

The creation of privacy and security laws has been a huge : unit outcomes addressed in this assignmentbulldemonstrate knowledge of federal and state health care legislation and
I online tutoring decides to sell its tutoring services : online tutors offers monthly access to students for either or both math or science tutors. a market study found that
Briefly discuss and explain the interactions of sara epcra : briefly discuss and explain the interactions of sara epcra serc lepc and hazwoper in regards to their main regulatory
You are the safety manager for a 50000 square foot : you are the safety manager for a 50000 square foot warehouse operation where paints and painting supplies are stored.
Should computer products accept offer to supply 300000 : 1. computer products corp. sells peripheral equipment used by both private businesses and the government. due to a
Choose a character from a movie or tv series who is a : choose a character from a movie or tv series who is a functioning addict. examples of movies and tv series are the
What are profits related with this option if live : customers to live theaters inc. can be divided into two groups seniors and everyone else. the inverse demand curves for
Deduce the expression for inverse demand curve for : the demand function for einstein bagels has been estimated as followsqx -15.87 - 40.73px 84.17py 0.55ax where qx
Based on the given scenario develop a plan of action that : based on the given scenario develop a plan of action that includes how you would conduct the investigation state how

Reviews

Write a Review

Microeconomics Questions & Answers

  How many hot dogs does each vendor want to sell

If each vendor sells exactly 100 hot dogs a day and the demand for hot dogs from vendors in the city is Q = 4400-1200P, how many vendors are there?

  Is there some other reasonable explanation

In spite of significant price increases for gasoline in the last two years, the amount of gasoline consumed has not decreased a lot--does this mean that gasoline is an exception to the law of demand.

  Suppose you bought corporate bond at its current market

assume you purchased a corporate bond at its current market price of 850 on january 2 2002. it pays 9 percent interest

  What determines the strength of a firms demand

Why do firms demand resources? In what way is a firm’s demand for a resource a derived demand? How does this differ from consumers’ demand for final commodities?

  Graph demand facing the situation note that this needs

a. each individual determinant analyzed for your situation with examples applicable to your situation and research

  Exaggerate the firm''s profit or costs

what you must give up to get something; what you are willing to give up to get it. the amount of money that you pay on the margin; the amount of money that you receive on the margin. what you are willing to give up to get it; what you must give up to..

  Explain what two properties characterize public goods

What role do proper rights play in creating common property resources Why are common property resources subject to market failure due to non excludability a. What two properties characterize public goods

  How to reduce greenhouse gas emissions

"we oppose a nationsl market for pollution rights, as this would put an undue burden on low-income households who would no longer be able to afford to drive cars or heat their homes. instead, we propose that large corporations be required to reduc..

  Find out velocity of money based on m1 money supply find

assume that a country estimates its m1 money supply at 20 million. a broader measure of the money supply m2 is 50

  Use a line drawing tool to show the effect of this change

suppose that at the same time as this demographic change occurs more college students decide to major in nursing. use a

  Find the total cost of volumes

The average total cost of operating a clinic is $800 per patient if the volume is one hundred patients, and $790 each patient if the volume is 110 patients. Find the total cost at each of these two volumes?

  What price will you charge the youngsters

How would your answers to part c above change, if you could still use a TPT strategy but you could not discriminate between the customers?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd