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Determine the Profit-Maximizing Price
If a firm targets a 25 % rate of return on sales, and has unit costs of production of $100, what price should it charge if it uses cost-plus pricing? If the firm has a demand function P = 10000 – 20Q is the cost-plus price the profit-maximizing price? If not, determine the profit-maximizing price, quantity and corresponding profit. Is the target rate of return the profit-maximizing r.o.r.? why or why not? What important economic considerations, does cost-plus pricing ignore?
Comparison with Our Targets : A proper objective assessment of our performance can be carried out only when we juxtapose our current achievements with: (i) planned or targeted
Meaning of absolute cost difference and comparative cost difference.
demand: Qd=100=Px supply: MC=10+1/2Qs assume first that this firm operates in a perfectly competitive market. find the price and quanity in this market.
Strictly give the diff. btw the theory of reciprocal demand & theory of comparative advantage
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