| The Goldberg- Scheinman Publishing Company is publishing a new managerial economics text for which it has estimated the following total fi xed and average variable costs: ________________________________________________ Total fixed costs: Copy editing $10,000 Typesetting 70,000 Selling and promotion 20,000 Total fixed costs $100,000 Average variable costs: Printing and binding $6 Administrative costs 2 Sales commissions 1 Bookstore discounts 7 Author’s royalties 4 Average variable costs $20 Project selling price $30 ________________________________________________ (a) Determine the breakeven output and total sales revenues and draw the cost– volume– profit chart, and (b) determine the output that would generate a total profit of $ 60,000 and the total sales revenues at that output level; draw the cost– volume– profit chart.
NOTE: You do not need to draw the chart |
| Salvator's chapter 8 spreadsheet problem 1 (p.357) |
| For the following table, calculate in Excel the average fi xed costs ( AFC), the average variable costs ( AVC), the average total costs ( ATC), and the marginal costs ( MC). | Quantity of Output | Total Variable Costs | Total Costs | AFC | AVC | ATC | MC |
| 0 | $ - | $ 30 | NA | NA | NA | NA |
| 1 | $ 20 | $ 50 | $ 30 | $ 20 | $ 50 | $ 20 |
| Note: Total Fixed Cost = $30 |
| From Figure 9-4, determine the effect of a 33 percent import tariff on commodity X.
NOTE: The tariff-inclusive price will be $3(1+.33) = $4. What are the impacts of tariff on domestic consumption, domestic production, imports, and government’s tariff revenue? Show the numbers; for example, at figure 9-4, if you draw a line starting at Px=$4 and parallel to the X axis, it will cross the demand curve, Dx, at 500X. Therefore, you know that the domestic consumption will decrease from 600X to 500X. | Text book page with figurre attached |
| If the market supply function of a commodity is QS = 3,250 and (a) the market demand function is QD = 4,750 – 50P and P is expressed in dollars, use Excel to calculate what the equilibrium price is by calculating values of QD and QS for P from 25 to 50 in 1’s. (b) If the market demand increases to QD' = 5,350 – 50P, what is the equilibrium price? (c) If the market demand decreases to QD'' = 4,150 – 50P, what is the equilibrium price? (d) For (a)–(c), if TC = 0.005(Q^2) – Q, what is the profit in each case?
NOTE: 2. Revised spreadsheet problem 1: Just answer 1(a) and 1(d). For 1(d), change “For (a) to (c)” to “For (a) only.” | See sheet 2 |
| Snack food venders and beer distributers earn some monopoly profits in their local markets but see them slowly erode from various new sub-stitutes. When California voted on legalizing marijuana, which side would you think that California beer distributors were on? What about snack food venders? Why?
NOTE: Think about substitutes and complements. For example, marijuana and snack foods are strong complements (or so we are told). |
| Relative to managers in more monopolistic industries, are managers in more competitive industries more likely to spend their time on reducing costs or on pricing strategies? |
| Your answer goes here |
| How does a decrease in U.S. interest rates affect the EU/ U.S. exchange rate?
NOTE: Use the carry trade to predict the impact of lower U.S. interest rates on Euro/$. |
| Your answer goes here |
| How will a dollar devaluation affect businesses and consumers in the twin cities of El Paso, United States, and Juarez, Mexico?
NOTE: Make sure you explain the impact on the twin cities, not just 1 city. |
| Your answer goes here |
jose.a
homework_help_1.xlsx
