Christabel Ireri

Problem 4 Part 2 [15] 0 points possible (ungraded) For a monopolistic company, the demand curve is given by the function P = 160 – 8Q, where P is the price per unit and Q is the total amount of units produced. The cost per unit, C, also depends the total amount of units produced and the relation is given by C = 120 – 6Q. That is, the price per unit decreases linearly as the number of units produced increases. a. Find the total profit U as a function of Q. Remember that Total profit = Total Revenue – Total Cost, where Total revenue is equal to price per unit times the total amount of units and Total Cost = cost per unit times the total amount of units. [3] b. Find the value of which maximizes the total profit U. Round your answer to the nearest integer. [8] c. Find the maximum value of the profit. [4]

EXPERT ANSWER Demand : P = 160 – 8QCost : c = 120 – 6Q a) Profit = Revenue – CostRevenue = P*Q = 160Q – 8Q2Profit : U = 160Q – 8Q2 – 120 – 6Q= 154Q – 8Q2 – 120Total profit function : U = 154Q – 8Q2 – 120   b) Maximizing total profit :dU/dQ = …

Problem 4 Part 2 [15] 0 points possible (ungraded) For a monopolistic company, the demand curve is given by the function P = 160 – 8Q, where P is the price per unit and Q is the total amount of units produced. The cost per unit, C, also depends the total amount of units produced and the relation is given by C = 120 – 6Q. That is, the price per unit decreases linearly as the number of units produced increases. a. Find the total profit U as a function of Q. Remember that Total profit = Total Revenue – Total Cost, where Total revenue is equal to price per unit times the total amount of units and Total Cost = cost per unit times the total amount of units. [3] b. Find the value of which maximizes the total profit U. Round your answer to the nearest integer. [8] c. Find the maximum value of the profit. [4] Read More »

Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the costs associated with one product line were as follows: first cost of $30,000 and annual costs of $18,000. Annual revenue was $27,000, and the used equipment was salvaged for $4000. What rate of return did the company make on this product? (20 points) (You should use an appropriate excel function) 4.

EXPERT ANSWER Year Cost Revenue Net Cashflow 0 -30000 -30000 1 -18000 27000 9000 2 -18000 27000 9000 3 -18000 27000 9000 4 -18000 27000 9000 5 -18000 31000 13000 IRR 17.85% Arrange the data as above, use IRR function and select the net cash flow which yeilds 17.85 percent