What price and quantity do you think this firm

Assignment Help Finance Basics
Reference no: EM132548939

1. Overheard at the water cooler: "The demand and cost estimates that were provided at the meeting are very useful [Q =400 - 8P and TC = 600 + 2Q]. Unfortunately, what we did not realize at the time was that our fixed costs were underestimated by at least 40 percent. This means that we'll have to adjust our price upward by at least 40 percent to cover the added fixed cost. In any case there is no way in the world we can survive by charging less than $28.00 for our product."

a. Comment on this statement. Do you agree with the speaker? Explain.

b. What price and quantity do you think this firm should charge and produce if it wants to maximize its short-run profit? Explain.

Reference no: EM132548939

Questions Cloud

Satisfy the market equilibrium demands : Is there a valid shortage of PPE or was there a business motive to gain financially to satisfy the market equilibrium demands?
Regarding data analytics and data mining : There is much discussion regarding Data Analytics and Data Mining. Sometimes these terms are used synonymously but there is a difference.
Encrypt documents and also encrypt data at rest : Discuss how you would implement a plan to classify and encrypt documents produced at your company.
Data science and big data analytics : Share a personal connection that identifies specific knowledge and theories from this course. Demonstrate a connection to your current work environment.
What price and quantity do you think this firm : What price and quantity do you think this firm should charge and produce if it wants to maximize its short-run profit? Explain.
According to the product life-cycle theory : According to the product life-cycle theory, by the time a product matures on the life-cycle a producer country also eventually
Economies of scale occur : In the Krugman model, if fixed costs are zero, will economies of scale occur?
What are the profit maximizing price and output : Suppose that the demand equation for the output of a monopoly is: Q=3,000-60P. The total cost equation is: TC=100+5Q+Q^2/480.
Why has the joint venture been successful to date : As of 2018, GM appears to be increasing its strategic commitments to China by building more factories and opening

Reviews

Write a Review

Finance Basics Questions & Answers

  Why do interest rates vary among countries

Interest Rates Why do interest rates vary among countries? Why are interest rates normally similar for those European countries that use the euro.

  What was joe investment return

What was Joe's investment return (in percentage terms) for the year, on the basis of the peso value of the shares?

  Strengths and weaknesses of the method

What are the strengths and weaknesses of the method that you recommend?

  What is meant by limited liability and stakeholders

What is meant by "limited liability"?- Explain whether you agree or disagree with the excerpt.- What is meant by "stakeholders"?

  Explain capital budgeting involves calculation of npv

Explain Capital budgeting involves calculation of NPV and IRR and Which projects will the firm select for investment

  Firm a has 10000 in assets entirely financed with equity

1.firm a has 10000 in assets entirely financed with equity. firm b also has 10000 in assets but these assets are

  Money to retire and make the withdrawals as planned

Carow Industries has just started to deposit $200 at the end of each month into its employees' retirement fund

  Calculate the value of a bond that matures

Calculate the value of a bond that matures in 10 years and has a $1,000 par value. The annual coupon interest rate is 9 percent and the market

  Cause of action against michael for polluting

Michael has 10 old vehicles parked in his backyard. One day Juan, Michael's neighbor, notices that oil is leaking from the cars and running under the fence into

  Develop an investment policy statement for your client

Develop an investment policy statement for your client. Calculate and interpret the arithmetic mean, holding period return, variance and covariance (correlation) of asset returns based on 5 year historical data.

  How much will be contributed to wills plan in a year by both

Will works for Micro Lance Computer Company and participates in its thrift and savings plan. For every $1.00 Will contributes to the plan, up to 5% of his salary, the company contributes $0.25. If Will's salary is $40,000 and he decides to maximize t..

  Current items of equal size on the balance sheet

What is the maximum amount of inventory Nelson can obtain in this manner? (Hint: The note and the inventory are both current items of equal size on the balance sheet.)

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