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Team helps students with Instructor materials such as Test banks Case Solutions. C) Both marginal revenue and marginal cost increases. A) The company’s marginal gain Mp is given by the equation: Mp = 80 – 0.2Q. Solutions Manuals are available for thousands of the hottest college and high school textbooks in subjects such as Math, Science (Physics , Chemistry , Biology ), Engineering ( Mechanical , Electrical , Civil ), Business and much more.

D) the average quantity of profit earned from the business’s industry. S3. A. To validate the values on our spreadsheet, we optimize cell F7 by altering cell B7. The optimal sales quantity is: Q = 2.4 million units and the best price is P = \$210. Coke and Pepsi’s marketing campaign will decrease the demand for generic soft drinks (placing downward pressure on the purchase price of standard soft drinks along with further reducing the quantity).

A more detailed estimate may judge so forth, and how many customer contacts a salesperson makes exactly what percent of these contacts result in company, what is the average profit of those accounts. If a sales person’s benefit is anticipated to be between \$ 100,000 and \$ 120,000 while the marginal cost is \$85,000, then the firm has a path of activity, namely employ the additional 1, 2, or 3 employees.

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Franchisees have an incentive to exaggerate the prices from which the parent’s divide is determined so as to reduce the measured gains they report. Given the simultaneous decrease in distribution and growth in demand, one would expect the cost. Since demand diminished (changed left) when the cost of desktops improved, memory modules and laptops are complements.

Email us and test bank. The next table shows the total revenue (in dollars) and total cost (in dollars) in the production and sale of unique components of a commodity. C. When price decreases to \$30, quantity required increases to 240 units, so consumer surplus increases to \$14,400 (computed as (0.5)(\$150-\$30)240 = \$14,400).