Which quantity would the two companies have equal profits

Assignment Help Business Economics

Reference no: EM131102707

Two companies, Lawnman Inc. and Tauro Co., are competing in the manufacture and sale of a new type of kryptonite-powered lawnmowers. Lawnman has a somewhat older plant and requires a variable cost of $150 per lawnmower; its fixed costs are $200,000 per year. Tauro's plant is more automated and thus has lower unit variable costs of $100; its fixed cost is $400,000.

Since the two companies are close competitors, they both sell their product at $250 per unit.

A) What is the break-even quantity for each?

B) At which quantity would the two companies have equal profits?

C) If sales of each company were to reach 4,500 units per year, which company would be more profitable? Why?

Reference no: EM131102707

Questions Cloud

What is the price per share : The balance sheets of Roop Industries are shown below. The 12/31/2004 value of operations is $651 million and there are 10 million shares of common equity. What is the price per share?

Designing an inheritance between classes : Using an example from your work or daily life, describe an "is-a" relationship. Why is an "is-a" relationship important when designing an inheritance between classes? What are the differences between "is-a" and "has-a" relationship?

Construct the corresponding marginal cost schedule : Lisa has a lawn-mowing business. Lisa hires students at $40 a day to mow lawns. Lisa leases 5 lawn mowers for $200 a day. Construct (graph) the corresponding marginal cost schedule. How many lawns should be cut during each day by Lisa’ business to mi..

What opportunities would international expansion give : What opportunities would international expansion give this organization? List 2 - 3 strategies the organization might use and analyze the benefits and risks associated with each. Justify, why In your opinion, international expansion is or is not a..

Which quantity would the two companies have equal profits : Two companies, Lawnman Inc. and Tauro Co., are competing in the manufacture and sale of a new type of kryptonite-powered lawnmowers. Lawnman has a somewhat older plant and requires a variable cost of $150 per lawnmower; its fixed costs are $200,000 p..

Explain the key features of the product : Explain the key features of the product on which your users will be trained. Explain how the content of the manual will address the needs of end users at various levels of technical expertise. Describe your manual and discuss how it will be comprehen..

Compute the signal-to quantizing-noise power ratio : Compute the signal-to quantizing-noise power ratio as a function of the word length of the ADC. State any assumptions you make

Using the theories and theorists from the text : Respond to the following question in a paper of 1,200-2,000 words:

User Account

All Pages