If the Demand for beans tends to decline as income increases rise ,everything else held constant, beans are _

The Rosa model of Mohave Corp. is currently manufactured as a very plain umbrella with no decoration. The company is considering

user100 [1]

Solution :

1. Incremental analysis when the demand for the decorated umbrella is 10,000 units.

$\text{Particulars}$ $\text{Rosa umbrella}$ $\text{Decorated umbrella}$ $\text{Incremental}$

$\text{Sales revenue}$ $80000 $190000 $110000

$\text{Less: Variable cost}$ $ 45000 $120000 $75000

Contribution $35000 $70000 $35000

$\text{Less: Additional}$ --- $10000 $10000

development cost.

$\text{Differential profit}$ $35000 $60000 $25000

The company earns an additional profit of $\$25,000$ if it decorates and sells the Rosa umbrella.

2. The company, Mohave should add the decorations to the Rosa umbrella as this would increase the net revenues of the company by an amount of $25,000.

3.a. The demand for he decorated umbrella will fall to 8,000 units due to the higher price. If the company does not make any changes to the Rosa umbrella, it could sell 10,000 units.

The incremental profit or loss is :

Incremental analysis when the demand for the Rosa umbrella is 10,000 units and for the decorated umbrella is 8,000 units is given below:

$\text{Particulars}$ $\text{Rosa umbrella}$ $\text{Decorated umbrella}$ $\text{Incremental}$

$\text{Sales revenue}$ $80,000 $152,000 $72,000

$\text{Less: Variable cost}$ $45,000 $96,000 $51,000

Contribution $35,000 $56,000 $21,000

$\text{Less: Additional}$ ---- $10,000 $10,000

development cost.

$\text{Differential profit}$ $35,000 $46,000 $11,000

The incremental profits are : $11,000.

3.b. The company should decorate and sell 8000 units of the decorated umbrellas as the increase in the net profit is $11,000.

8 0

3 years ago

Economies of scale exist when the_____ Group of answer choices total cost of production falls as the output increases. cost of p

nataly862011 [7]

Answer:

Cost of producing a unit of a good falls as its output increases.

Explanation:

Companies achieve economies of scale when their production costs per unit decrease as the company uses fewer inputs to produce one unit of product.

For example, a company produces 10,000 units with a total cost of $20,000 (cost of producing one unit is $2). If the company increases its total production to 15,000 units with a total cost of $25,000 (cost of producing one unit is $1.67).

3 0

3 years ago

How will employers respond to an increase in the minimum wage?

kherson [118]

Answer:

C

Explanation:

Increasing minimum wage increases the cost of hiring labour. As a result, firms would reduce the amount of labour skilled labour employed in order to reduce cost of hiring labour.

Another option, is for firms to hire more skilled labours

4 0

3 years ago

In his book, The Art of the Long View, Peter Schwartz identified the process of constructing multiple stories of what could happ

Natali5045456 [20]

Author Peter Schwartz in his book "The Art of the Long View" referred to scenarios, when identifying the process of building stories that could happen and following an important step for companies.

<h3 /><h3>What is the purpose of the book?</h3>

The author creates a scenario approach to assist in the development of the strategic vision, through the analysis of possibilities that help to create a broad and systematic vision in the decision-making process.

Therefore, the strategic vision is essential for every organization, as it helps in making more effective decisions to deal with different situations and inherent risks of the internal and external environment, making the business more positioned and competitive in the market.

Find out more about strategic vision here:

brainly.com/question/24967768

6 0

3 years ago

List the four factors of production

yawa3891 [41]

Answer:

The four factors of production are land, labor, Capita and entrepreneurship.

3 0

3 years ago

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If the Demand for beans tends to decline as income increases rise ,everything else held constant, beans are __.