managerial assignment
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exercise_1.xlsxEconomic Functions I
| Part 1: | |||||
| Quantity (Qd) | Price (P) | Total Revenue | Marginal Revenue | ||
| 0 | |||||
| 1 | |||||
| 2 | |||||
| 3 | |||||
| 4 | |||||
| 5 | |||||
| 6 | |||||
| 7 | |||||
| 8 | |||||
| 9 | |||||
| 10 | |||||
| 11 | |||||
| 12 | |||||
| 13 | |||||
| Part 3: | |||||
| a. How is marginal revenue reflected in the total revenue curve? | |||||
| b. Referring to the table, within what range of output (quantity) is total revenue maximized. Briefly explain. | |||||
| c. Using the expression for marginal revenue, enter a formula to calculate the exact quantity that maximizes total revenue. | |||||
| NOTE: Calculate to two decimal places. | |||||
| d. Using your answer in c. and the inverse demand function (Price column), enter a formula to calculate maximum total revenue. | |||||
| NOTE: Calculate to nearest whole number. | |||||
Managerial Analysis Practice Exercise 1 (There are 4 worksheets to this exercise) Economic Functions I Given the demand function, Qd = 13 - 0.0075P, do the following: Part 1: Complete the table below for Price, Total Revenue, and Marginal Revenue. NOTE: Use calculus to derive a formula for, as well as to calculate, marginal revenue. Round all figures in your expressions to the nearest whole number. Part 2: In two SEPARATE graphs, plot total revenue and marginal revenue, using Excel's graphing tool to create a "Scatter" diagram (any type). NOTE: Be sure to include the column headings in selecting your data ranges. Place the two graphs to the right of the table below. Part 3: Answer each question below in the text box provided.
Economic Functions II
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| Quantity (Q) | Total Cost | Marginal Cost | |||||||||||||
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| Part 3: | |||||||||||||||
| a. Using the formula for marginal revenue in the previous worksheet and the formula for marginal cost in this worksheet, | |||||||||||||||
| write the formula for the profit-maximizing quantity in the text box below. | |||||||||||||||
| NOTE: You should end up with an expression, in terms of Q, set equal to zero. | |||||||||||||||
| b. Using the Quadratic Formula, find the profit-maximizing quantity (Round your answer to two decimal places). | |||||||||||||||
| NOTE: You may do the work outside of the text box (or even Excel), with just your answer placed in the text box below. | |||||||||||||||
| c. Confirm your answer in b. by entering a formula that satisfies the second-order condition for a maximum point. | |||||||||||||||
Economic Functions II Given the total cost function, TC = 1500 + 510Q - 125Q2 + 12Q3, do the following: Part 1: Complete the table below for Total Cost and Marginal Cost. NOTE: Use calculus to derive a formula for, as well as to calculate, marginal cost. Part 2: In two SEPARATE graphs, plot total cost and marginal cost, using Excel's graphing tool to create a "Scatter" diagram (any type). NOTE: Be sure to include the column headings in selecting your data ranges. Place the two graphs to the right of the table below. Part 3: Answer each question below in the text box provided.
Demand and Supply
| a. Suppose the market price (P) were $200 per console. How many consoles would be demanded? How many supplied? | |||||||||||||
| NOTE: For each box below, calculate the respective quantity at a price of $200. | |||||||||||||
| Quantity Demanded: | |||||||||||||
| Quantity Supplied: | |||||||||||||
| b. At the market price of $200, would market be in equilibrium? If not, would there be excess demand or excess supply? | |||||||||||||
| c. Calculate the equilibrium price and quantity in this market (calculate price to the nearest cent and quantity to the nearest whole value). | |||||||||||||
| NOTE: You may do the work outside of Excel, just putting your answer in the boxes below. | |||||||||||||
| Equilibrium Price: | |||||||||||||
| Equilibrium Quantity: | |||||||||||||
| d. At equilibrium, what is the price elasticity of demand? What is the price elasticity of supply? | |||||||||||||
| NOTE: Use the equilibrium price and quantity, as well as your demand and supply equations, to enter each calculation below. | |||||||||||||
| Price Elasticity of Demand: | |||||||||||||
| Price Elasticity of Supply: | |||||||||||||
| e. Suppose average income decreased to $1,800, while the price of a memory card (PM) decreased to $50. | |||||||||||||
| What would be the new equilibrium price and quantity (calculate price to the nearest cent and quantity to the nearest whole value)? | |||||||||||||
| NOTE: You may do the work outside of Excel, just putting your answer in the boxes below. | |||||||||||||
| Equilibrium Price: | |||||||||||||
| Equilibrium Quantity: | |||||||||||||
Demand and Supply Suppose the demand for video game consoles is given by, Qd = 1200 - 22P - 2PG + 3I, where Qd is the quantity of video game consoles demanded, P is the price of a video game console in dollars, PG is the price of a video game in dollars, and I is average consumer income. The supply of video games is given by, Qs = -600 + 35P - 30PM, where Qs is quantity of video game consoles supplied, and PM is the price of memory cards, an input used to make consoles. Suppose, initially: PG = $40, I = $2,000, and PM = $80. Use this information to answer the questions below.
Elasticity and Total Revenue
| Part 1: | ||
| Quantity (Qd) | Price (P) | Price Elasticity of Demand |
| 0 | ----- | |
| 50 | ||
| 100 | ||
| 150 | ||
| 200 | ||
| 250 | ||
| 300 | ||
| 350 | ||
| 400 | ||
| 450 | ||
| 500 | ||
| 550 | ||
| 600 | ||
| 650 | ||
| 700 | ||
| 750 | ||
| 800 | ||
| 850 | ||
| 900 | ||
| 950 | ||
| 1000 | ||
| 1050 | ||
| 1100 | ||
| 1150 | ||
| 1200 | ||
| Part 2: | ||
| a. What price maximizes the firm's total revenue? | ||
| b. Within what price range could the firm increase total revenue by raising price? Why? | ||
| c. Within what price range would the firm experience reductions in total revenue by raising price? Why? | ||
Elasticity and Total Revenue Given the demand function for a firm, Qd = 1200 - 0.4P, do the following: Part 1: Complete the table below for Price and Price Elasticity of Demand at each level of output. NOTE: For price, it will be helpful to use the inverse form of the demand function. Part 2: Answer each question below in the text box provided.
