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UnitV_AssignmentWorksheetOrvilleStewart289220.docxEssay
Calculation
I was happy as a consultant to help Tracy, who is the Ruby Red Movie Theater manager. Tracy was worried about concession stand sales, and I was delighted to help her with the company worksheet data. I was happy that this was my field of expertise because this worksheet was a lot of calculation for me to complete the table for each day's concession items and labor produced each day. The first calculation was for the variable cost. This formula is VC= unit price of variable times the total number of variable resources. Calculating the variable cost lets us know how to buy the necessary resources for the items sold in the concession stand. It is vital because if the movie theater could not sell any item in their concession stand, this would give them a reason to buy more products. The other formula used for this table is the total cost formula. This formula is TC= fixed cost plus variable cost. For example, for the worksheet above for the movie theater, when zero units of output for the concession stand items were produced, the total cost equaled two thousand dollars. This was when one-hundred items were produced per day. That has a total cost that equaled two thousand dollars. This formula is similar to the marginal cost, but you will use the change in the total revenue rather than the change in total cost. And the formula would be MR= change in total revenue. Then you divide by the change in output. Then the following formula would be the average total cost, and the average total cost set of numbers would be different. This will be needed to complete the worksheet. This formula is ATC= total cost, then you divided by output. Finally, total revenue will be the last formula needed. And this formula is TR= this price multiplied by the quantity.
Maximum Profit Level
The maximum profile level for the theater generated from the concession stand is 1,290 items, with a profit of $146,480. So by looking at the calculation on the worksheets, this would be the maximum profit level. From examining the worksheet, I found that the movie theater will produce 1,290 items and have about 20 people on the job. So also, allow the theater to make a profit of $146,480 off those items. The company needs to know in order not to overproduce or to over-staff. When there is an overage, any of these places will decrease profit for the movie theater, which would result in a negative outlook for the movie theater. I came up with the conclusion by conducting all these calculations that I have to explain previously. By examining the items, they seem there would be a lot to sell, but it is possible if the theater manager Tracy, stays ahead of the company schedule.
Average Price Level.
When looking at the average price level for the theater concession stand items, I could say it stay at eight dollars where it was at first. Because there where no profit being made for the concession stand items. For at least when nine-hundred items sold. The current situation in the country right now, I highly think that any movie theater tickets will be selling over nine hundred concession stand items. After looking at the worksheet and using the formula, if the movie theater holds its price at eight dollars for items, it may have a negative outlook and be forced to close its doors. This is a sticky situation for Tracy, the manager of the theater. The theater leadership would need to lead her team to make the sales to correct the price. Individuals in society love to go to the movies and gravitate towards the concession stand because most people love to have a snack or two before watching the movies. Whether it be for a large cup of iced drink or buttered-up popcorn, which I like, or they may prefer crunch of candies. When people decided to head to the movie theater, they go to watch the actual movie, but they enjoy the overpriced snacks and large soda drinks.
Reference
McEachern, W. A. (2019). Micro ECON6: Principles of microeconomics. Cengage Learning. https://online.vitalsource.com/#/books/9781337671828
This worksheet is intended to help you develop the information you will use to complete your Unit V Essay. You are expected to include the completed table in your Unit V Essay. The additional questions after the tables are intended to help you formulate your ideas concerning what you will write in your essay.
Just completing this worksheet does not constitute completing the Unit V Assignment. The information from the worksheet must be incorporated into your essay submission. Follow the instructions below.
Instructions:
1. Complete all parts of the Unit V Assignment Worksheet.
2. Answer the questions after the table; these will help you formulate your ideas for writing the essay part of your Unit V Assignment. You are expected to expand on these questions in your writing.
3. Include the tables and your question responses from the Unit V Assignment Worksheet as an appendix following the essay part of your Unit V Assignment.
On the next page, you are provided with a table showing the different levels of output for concession stand items that are possible as the number of workers used changes. Also included are the price of labor, the total fixed cost per day, and the average price of concession stand items. Using the information you learned from the textbook for this class as well as the information in the Unit V Lesson:
1. Complete the table below concerning concession stand topics.
2. Answer all of the questions listed below the table. As mentioned, doing this will help you when formulating your thoughts for the essay part of your Unit V assignment.
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Round These Answers to the Nearest Whole Number |
Round These Answers to the Nearest Penny |
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Output (Concession Stand Items) |
Number of Workers Employed Per Day |
Price of Labor Per Worker Per Day |
Total Variable Cost of Labor |
Total Fixed Costs Per Day |
Total Cost Per Day |
Average Price of Concession Stand Items |
Total Revenue |
Profit |
Average Variable Cost |
Average Fixed Cost |
Average Total Cost |
Marginal Cost |
Marginal Revenue |
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0 |
0 |
$120 |
0 |
$2,000 |
2,000 |
$8.00 |
0 |
$-2,000 |
0 |
0 |
0 |
0 |
0 |
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100 |
2 |
$120 |
12,000 |
$2,000 |
14,000 |
$8.00 |
800 |
$-6,000 |
120 |
20 |
$140 |
120 |
$8 |
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400 |
4 |
$120 |
48,000 |
$2,000 |
50,000 |
$8.00 |
2,200 |
$-46,000 |
120 |
1600 |
$125 |
120 |
$8 |
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750 |
6 |
$120 |
90,000 |
$2,000 |
92,000 |
$8.00 |
6,000 |
$-86,000 |
120 |
2.70 |
$122.70 |
120 |
$8 |
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900 |
8 |
$120 |
108,000 |
$2,000 |
110,000 |
$8.00 |
7,200 |
102,800 |
120 |
2.20 |
$122.20 |
120 |
$8 |
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1,025 |
10 |
$120 |
123,000 |
$2,000 |
125,000 |
$8.00 |
8,200 |
116,800 |
120 |
2.00 |
$122.00 |
120 |
$8 |
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1,125 |
12 |
$120 |
135,000 |
$2,000 |
137,000 |
$8.00 |
9,000 |
128,000 |
120 |
1.80 |
$121.80 |
120 |
$8 |
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1,200 |
14 |
$120 |
144,000 |
$2,000 |
146,000 |
$8.00 |
9,600 |
137,000 |
120 |
1.70 |
$121.70 |
120 |
$8 |
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1,250 |
16 |
$120 |
150,000 |
$2,000 |
152,000 |
$8.00 |
10,000 |
142,000 |
120 |
1.60 |
$121.60 |
120 |
$8 |
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1,280 |
18 |
$120 |
153,600 |
$2,000 |
155,000 |
$8.00 |
10,240 |
145,260 |
120 |
1.60 |
$121.60 |
120 |
$8 |
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1,290 |
20 |
$120 |
154,800 |
$2,000 |
156,800 |
$8.00 |
10,320 |
146,480 |
120 |
1.60 |
$121.60 |
120 |
$8 |
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1,289 |
22 |
$120 |
154,680 |
$2,000 |
156,600 |
$8.00 |
10,312 |
146,368 |
120 |
1.60 |
$121.60 |
120 |
$8 |
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1,280 |
24 |
$120 |
153,600 |
$2,000 |
155,600 |
$8.00 |
10,240 |
145,360 |
120 |
1.60 |
$121.60 |
120 |
$8 |
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Questions: Use your responses to these questions to help you formulate ideas for writing your Unit V Essay.
Question 1: What is the level of profit that is made by Ruby Red Movie Theater if 2 workers are employed at the concession stand and only 100 items of output are produced (sold) at the concession stand?
Answer:
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When examining the level of profit made by the theater, if two workers are employed at the concession stand, and only 100 items of output are produced(sold) at the concession would be $-6,000.
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Question 1a: Should Ruby Red Movie Theater continue to operate the concession stand if only 100 concession stand items are being produced (sold) by 2 workers? Why, or why not?
Answer:
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The movie theater should stop operating the concession stand if selling items is 100 items being produced by two workers. Because it would be a loss instead of a profit, buy the Theater
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Question 2: If Ruby Red Movie Theater wanted to produce (sell) 1,290 items from the concession stand, would profit be maximized? Why, or why not?
Answer:
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If the Movie Theater wants to produce(sell) 1,290 items from its concession stand. The theater profit would not be maximized, and this is because the total cost exceeds the level of revenue being generated, which result in a company loss of -$146,480
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Question 3: At what level of output and labor input are concession stand profits maximized for Ruby Red Movie Theater? What are two ways you could tell if this was correct from the table data?
Answer:
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Based on the data examine, at no level of output and labor input that the theater concession stand profits were maximized. And this is because the total cost incurred for the theater is more than the total revenue generated.
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Question 4: How are average total cost and marginal cost related to marginal product and average product?
Answer:
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For the marginal product, this happens when there was a change in the total product when you divided it by the change in the quantity of resources. Furthermore, the average product is the total product when it is divided by economic resource quantity. Also, average products will come to its peak when it intersects with the marginal product curve. The marginal cost is less than the average variable cost, and the result will decrease the average cost. On the flip side, if the marginal cost is greater, the average variable cost will increase.
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Question 5: What do you notice about marginal revenue and the price of output (average price of concession stand items in this case)?
Answer:
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When a company calculates marginal revenue, this is done by dividing the change in total revenue because of the change in total output quantity. Therefore, the company sale price for a single additional item that sold equals marginal revenue.
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Question 6: What is the maximum level of profit that can be generated from concession stand items?
Answer:
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When looking at the profit-maximizing level that can be generated from the company concession stand is 1,290 items, with a profit of $146,480
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Next Step:
Once you have completed the table and answered questions 1–6 above, your next step will be to write your essay. The information from these questions should be used when writing the essay. See Unit V Assignment instructions.
