What is maxs most profitable course of action

Reference no: EM13205769

Max Whitley, manager of Whitley Construction, builds new homes in a booming community in the Midwest. Although the sales have slowed down because of a national recession, it now looks as if the recession is about to end. Max wants to be ready with material, labor and foremen to meet the demand for housing. Last year, Max built and sold 40 ‘starter homes', the most popular model. With a recent recession over, Max thinks that his sales will increase to 50 units for the current year. The going market price for this model (which Max and his numerous competitors have charged) has been $105,000. In addition, Whiteley Construction's marginal cost of building this model averages $75,000. Based on these facts, suggest a course of action for Max. Suppose the economic boom raises the cost of labor and raw materials, so that the additional cost of a starter house raises to $75,000. What is Max's most profitable course of action?

Reference no: EM13205769

Questions Cloud

Determine are there multiple break even points : Suppose that a firm sells in a competitive market at a fixed price of $42.50 per unit. The firm's cost function is: C = 150 + 5Q. Determine the minimum quantity at which the can break even. Are there multiple break even points

State a mechanism to account for this product : Dehydration of 2-methylcyclohexanol gives small amounts of 1-ethyl-cyclopentene. Write a mechanism to account for this product.

Explain should the company consider expanding capacity : Night Timers is a small company manufacturing glow-in-the-dark products. One of the hottest items the engineering department has developed is adhesive tape that can be applied to walls and floors. Night Timers chief engineer anticipates that the p..

Explain a radioactive isotope may change a proton : A radioactive isotope may change a proton into a neutron in an attempt to become more stable. While doing so, a particle is emitted from the nucleus of that isotope.

What is maxs most profitable course of action : Max Whitley, manager of Whitley Construction, builds new homes in a booming community in the Midwest. Although the sales have slowed down because of a national recession, it now looks as if the recession is about to end. Max wants to be ready with..

Prepare journal entries to record january transactions : Dividends during January were $3,000A. Open T accounts for each of the accounts listed in the trial balance, and enter the opening balances for 2011.B. Prepare journal entries to record each of the January transactions

State what is the ph of the resulting solution : M HNO3 is mixed with 439 mL NaOH with pH=13.97. What is the pH of the resulting solution?

Define the natural monopolies provided by a private firm : Discuss the difference between a traditional monopoly and a natural monopoly. Include the following points in your discussion. Identify the incentives to produce and price the product for a traditional monopoly and natural monopoly.

State compound y is unusually stable : Compound Y is unusually stable. What is the structure of Y and how is it formed?

User Account

All Pages