A company is planning to manufacture and market a new two-slice electric toaster. After conducting extensive...
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A company is planning to manufacture and market a new two-slice electric toaster. After conducting extensive market surveys, the research department provides the following estimates: a weekly demand of 200 toasters at a price of $16 per toaster and a weekly demand of 300 toasters at a price of $14 per toaster. The financial department estimates that weekly fixed costs will be $1, 400 and variable costs (cost per unit) will be $4 (A) Assume that the relationship between price p and demand a is linear. Use the research department's estimates to express p as a function of r and find the domain of this function. (B) Find the revenue function in terms of æ and state its domain. (C) Assume that the cost function is linear. Use the financial department's estimates to express the cost function in terms of x (D) Graph the cost function and revenue function on the same coordinate system for 0 <a < 1,000. Find the break- even points and indicate regions of loss and profit. (E) Find the profit function in terms of r. (F) Evaluate the marginal profit at r = 250 and r = 475 and interpret the results. A company is planning to manufacture and market a new two-slice electric toaster. After conducting extensive market surveys, the research department provides the following estimates: a weekly demand of 200 toasters at a price of $16 per toaster and a weekly demand of 300 toasters at a price of $14 per toaster. The financial department estimates that weekly fixed costs will be $1, 400 and variable costs (cost per unit) will be $4 (A) Assume that the relationship between price p and demand a is linear. Use the research department's estimates to express p as a function of r and find the domain of this function. (B) Find the revenue function in terms of æ and state its domain. (C) Assume that the cost function is linear. Use the financial department's estimates to express the cost function in terms of x (D) Graph the cost function and revenue function on the same coordinate system for 0 <a < 1,000. Find the break- even points and indicate regions of loss and profit. (E) Find the profit function in terms of r. (F) Evaluate the marginal profit at r = 250 and r = 475 and interpret the results.
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Managerial economics applications strategy and tactics
ISBN: 978-1439079232
12th Edition
Authors: James r. mcguigan, R. Charles Moyer, frederick h. deb harris
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