Total variable cost and total fixed cost

Assignment Help Business Economics

Reference no: EM131118485

A small fitness center that offers only personal training services has the following demand and cost parameters: Demand: The fitness center has found that it has some discretion in pricing¬¬—that is, it can raise price marginally without drastic reductions in volume. Based on statistical estimates of demand and assuming that external factors stay constant (e.g., price of competitors' services, income levels, etc.), the following relationship exists between the hourly rate for a personal training session (P) and the number of sessions demanded per day (Q): P = 140 – Q. Costs: The fitness center finds that its variable costs (e.g., labor) increase at a constant rate of $40 with each additional training session provided per day. Fixed costs such as rent are equal to $200 per day. This yields the following total variable cost (TVC) and total fixed cost (TFC) equations: TVC = 40Q. TFC = 200.

Reference no: EM131118485

Questions Cloud

Determine the price point the company : Using the target price of $5.99, determine the price point the company should use for the wholesaler. Does this price point allow the company to maintain its desired 45 percent mark-up? If you know that the consumer price elasticity for this pro..

What should be the price of the policy : If the company wants to make a profit of $200 above the expected cost, what should be the price of the policy?

An employee under the following circumstances : 1. Joey, who is single, is not covered by another qualified plan and earns $118,000 at his job in 2015. How much can he contribute to a traditional IRA or to a Roth IRA in 2015?

Evaluate role of religion and superstition on art history : Evaluate the role of religion and superstition on art and art history. Create and explain a five-point checklist of what you should notice when seeing a work of art for the first time.

Total variable cost and total fixed cost : A small fitness center that offers only personal training services has the following demand and cost parameters: Demand: The fitness center has found that it has some discretion in pricing¬¬—that is, it can raise price marginally without drastic redu..

Opinions of the employees : Companies need to ask the opinions of the employees and make them feel like they have a part in the process, even if they really don't. If you are the employees what is your opinion on this?

The managing director of your company explaining : Prepare a report for the managing director of your company explaining how costs may be classified by their behaviour, with particular reference to the effects both on total and on unit costs.your report should:

Establishment of effective work groups : Discuss how you can forge a long-term marketing strategy in your organization. How can the establishment of effective work groups assist you here?

Design a gallery dedicated to works of art from baroque : Your local art museum has asked you to design a gallery dedicated to works of art from one of the following movements: Renaissance, Baroque, Romanticism, Impressionism and Modernism.

User Account

All Pages