Revenue Would Be Maximized When Marginal Costs Equal Marginal Revenue..

“Maximizing Revenue” Please respond to the following: * From the scenario, assuming Katrina’s Candies is operating in the monopolistically competitive market structure and faces the following weekly demand and short-run cost functions: VC = 20Q+0.006665 Q2 with MC=20 + 0.01333Q and FC = $5,000 P = 50-0.01Q and MR = 50-0.02Q *Where price is in $ and Q is in kilograms. All answers should be rounded to the nearest whole number. Algebraically, determine what price Katrina’s Candies should charge if the company wants to maximize revenue in the short run. Determine the quantity that would be produced at this price and the maximum revenue possible Solution: 1) Revenue would be maximized when marginal costs equal marginal revenue. MC = MR 20 + 0.01333Q = 50 – 0.02Q 0.01333Q + 0.02Q = 50 – 20 0.03333Q = 30 Q = 30 / 0.03333 Q = 900 (rounded to the nearest whole number) Now, we have to substitute Q = 900 in the price equation: P = 50 – 0.01Q P = 50 – 0.01 (900) P = 50 – 9 P = $41 Therefore, price to be charged in the short-run, P = $41 Quantity that would be produced at this price, Q = 900 kilograms 2) Maximum revenue possible (maximum profit that is possible) = Total revenue – Total costs Total revenue = P * Q = (50 – 0.01Q) * Q 50Q – 0.01Q2 When Q = 900 Total revenue = 50 (900) – 0.01 (900)2 45,000 – 8,100 $36,900 Total costs = Variable costs + Fixed costs 20Q+0.006665 Q2 + $5,000 When Q = 900 Total costs = 20 (900) + 0.006665 (900)2 + 5,000 18,000 +5398.65 + 5000 $28,398.65 Maximum Profit = Total revenue – Total costs [50Q – 0.01Q2] – [20Q+0.006665 Q2 + $5,000] 30Q –...

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All Answers Should Be Rounded To The Nearest Whole Number.

From the scenario, assuming Katrina’s Candies is operating in the monopolistically competitive market structure and faces the following weekly demand and short-run cost functions: VC = 20Q+0.006665 Q2 with MC=20 + 0.01333Q and FC = $5,000 P = 50-0.01Q and MR = 50-0.02Q *Where price is in $ and Q is in kilograms. All answers should be rounded to the nearest whole number. Algebraically, determine what price Katrina’s Candies should charge in order for the company to maximize profit in the short run. Determine the quantity that would be produced at this price and the maximum profit possible. Answer: P = 50-0.01Q……..demand curve Profit is maximized at a point where MR = MC i.e. 50-0.02Q = 20 + 0.01333Q or 30 = 0.03333Q, implies profit maximizing quantity (Qm) = 30/0.03333 = 900 approx. And profit maximizing price (Pm) = 50-0.01*900 = $41 [using demand curve] So maximum profit = total revenue – total cost = P*Q – FC – VC = 41*900 – 5000 – 20*900-0.006665*(900^2) = $8501.35 All Answers Should Be Rounded To The Nearest Whole Number....

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The Classification Of The Accounts Depends On The Specific Purpose.

In general, account means the record of the payment transaction which takes place between a buyer and seller for a particular time period. The classification of the accounts depends on the specific purpose. But in general, there are two types of the accounts – personal and impersonal account. Personal accounts are related to any person or institution or any company account. It includes bank a/c and creditor a/c etc. Impersonal accounts are further two types – real accounts and nominal accounts. Real accounts are related to the assets which can be felt or touched like building account, machinery account, stock or furniture account etc. Nominal accounts are related to the income and expenses that includes salary, commission or rent etc. Debit and credit are two fundamental aspects of every accounts transaction and it helps in understanding the exact condition of the business through analyzing the accounts. For example – of the credit is increasing and debit is decreasing it means that company is earning revenues and if the debit is increasing and credit is decreasing it means that expenses is increasing in the company. The Classification Of The Accounts Depends On The Specific Purpose...

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Individual Assignment .

ACC 281 Week 3 Individual Assignment Week 3 Individual Assignment University of Phoenix ACC 281 xxxxxx xxxx       E9-3 The ledger of Hixson Company at the end of the current year shows Accounts Receivable $120,000, Sales $840,000, and Sales Returns and Allowances $30,000.   Instructions (a) If Hixson uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31; assuming Hixson determines that Fell’s $1,400 balance is uncollectible.   Dec 31 Bad Debt Expense 1,400      Account Receivable (To record uncollectible balance fro Fell) 1,400   (b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 10% of accounts receivable.   Dec 31 Bad Debts Expense 8,100      Allowance for Doubtful Accounts (To record bad debt exp. $84,000-$30,000×1%) 8100 Bad Debts Expense 9,900      Allowance for Doubtful Accounts (To record bad debt exp. $120,000×10%-$2,100) 9,900   (c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of net sales and (2) 6% of accounts receivable.   Dec 31 Bad Debts Expense 6,075      Allowance for Doubtful Accounts (To record bad debt exp. $840,000-$30,000x.75%) 6,075 Bad Debts Expense 7,400     Allowance for Doubtful Accounts (To record bad debt exp. $120,000×6%+$200) 7,400   E10-2 Trudy Company incurred the following costs. 1. Sales tax on factory machinery purchased                                                              $5,000 2. Painting of and lettering on truck immediately upon purchase                                    700 3. Installation and testing of factory machinery                                                            2,000 4. Real estate broker’s commission on land purchased                                                  3,500 5. Insurance premium paid for first year’s insurance on new truck                                  880 6. Cost...

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Bus 204 Estimate How Much The Money Supply Will Increase In Response To A New Cash Deposit Of $500 By Completing The Accompanying Table.

BUS 204 Unit 4 Assignment   Question: In Westlandia, the public holds 50% of M1 in the form of currency, and the required reserve ratio is 20%. 1. Estimate how much the money supply will increase in response to a new cash deposit of $500 by completing the accompanying table. (Hint: The first row shows that the bank must hold $100 in minimum reserves—20% of the $500 deposit—against this deposit, leaving $400 in excess reserves that can be loaned out.  However, since the public wants to hold 50% of the loan in currency, only $400 × 0.5 = $200 of the loan will be deposited in round 2 from the loan granted in round 1.) Round Deposits Required reserves Excess reserves Loans Loan proceeds held as currency Loan proceeds deposited 1  $500.00  $100.00  $400.00  $400.00  $200.00  $200.00 2  $200.00  $40.00  $160.00  $160.00  $80.00  $80.00 3  $80.00  $16.00  $64.00  $64.00  $32.00  $32.00 4  $32.00  $6.40  $25.60  $25.60  $12.80  $12.80 5  $12.80  $2.56  $10.24  $10.24  $5.12  $5.12 6  $5.12  $1.02  $4.10  $4.10  $2.05  $2.05 7  $2.05  $0.41  $1.64  $1.64  $0.82  $0.82 8  $0.82  $0.16  $0.66  $0.66  $0.33  $0.33 9  $0.33  $0.07  $0.26  $0.26  $0.13  $0.13 10  $0.13  $0.03  $0.10  $0.10  $0.05  $0.05 Totals  $833.25  $166.65  $666.60  $666.60 $333.30  $333.30     2. How does your answer compare to an economy in which the total amount of the loan is deposited in the banking system and the public doesn’t hold any of the loans in currency?  (Hint: Do another table with none of the loan proceeds held in currency.) As shown in the table above, after 10 rounds, loans can expand by $666.60. This is also the increase in the money supply at this point. Although deposits increase by $833.25, currency held by the public falls by $166.70, it initially fell by $500...

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