Plot the appropriate short run and revenue curves ( you may need more than one diagram, and tables) to determine at which price and output levels "Draw Ltd", would achieve:

• maximum profit (or minimum loss)
• break even
• output maximum
• total revenue maximum

 

Available Output, Cost and Revenue Data

Econometric evidence on the level of company productivity suggests that the most efficient short run method to produce Q output of pencils is with full time workers L=0.0202 x Q.

The accountant has found that the cost of a worker in the short run is W=21972.133, the rent of the buildings is 245, whilst other capital costs are 128.

Statistical analysis by the sales/marketing team also finds that the inverse demand curve for the firm is given by:  P= 1778.76- 24.705Q,

where Q is the quantity demanded and P is the price of pencils set by the firm. Note for the time period of that analysis all other market conditions were fairly constant.

Posted Date: 3/9/2013 1:03:01 AM | Location : United States

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