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luda_lava [24]
3 years ago
6

Suppose a farmer in Georgia begins to grow peaches. He uses​ $1,000,000 in savings to purchase​ land, he rents equipment for ​$

a​ year, and he pays workers ​$ in wages. In​ return, he produces baskets of peaches per​ year, which sell for ​$ each. Suppose the interest rate on savings is percent and that the farmer could otherwise have earned ​$ as a shoe salesman. What is the​ farmer's economic​ profit? The peach farmer earns economic profit of ​$ nothing. ​(Enter your response as an​ integer.)
Business
1 answer:
8_murik_8 [283]3 years ago
7 0

Answer:

$-675,000

Explanation:

here is the full question

Suppose a farmer in Georgia begins to grow peaches. He uses​$1,000,000 in savings to purchase​ land, he rents equipment for​$80,000 a​ year, and he pays workers ​$130,000 in wages. In​return, he produces 200,000 baskets of peaches per​ year, which sell for ​$3.00 each. Suppose the interest rate on savings is 3 percent and that the farmer could otherwise have earned ​$35,000 as a shoe salesman.

Economic profit = accounting profit - implicit cost

Accounting profit= total revenue - explicit cost

Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives

Explicit cost includes the amount expended in running the business. They include rent , salary and cost of raw materials

total explicit cost = (1,000,000 + $80,000 + $130,000) = $1,210,000

total revenue = price x output

$3 x 200,000 = $600,000

Accounting profit = $600,000 - $1,210,000 = $-610,000

implicit cost = amount he could have earned working as a sales man = $35,000

Interest on loan = 0.03 x 1,00,000 = 30,000

total = 35,000 + 30,000 = 65,000

economic profit = $-610,000 - 65,000 = $-675,000

The peach farmer earns economic profit of ​$

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Sterling Morrow, a fashion brand known for casual dresses, is launching a new product line: Carry Tu, a line of women’s fashion
Rina8888 [55]

Answer with Explanation:

If the company desires Carry Tu product line to breakeven within first 8 months then my recommendation would be to target working class women. This is because working class women spend most of their earnings on fashion bags, clothing, shoes, satchel, makeup, overnight bags, cell phones, jewelry, etc. So if we are targeting a customer who has higher purchasing power then it is more likely that our quality product will breakeven very quickly. A working class women roughly owns 2-4 bags which means their is huge market for Carry Tu, especially in the case of working class women. Other items like overnight bags, satchel, card holder key-chains, laptop bags, etc will be adding value due to growing demand of quality products and shopping habits of working class women.

Satchel is usually used by both students and working class women, now again it will be one of the most value adding product among the Carry Tu product line.

Laptops bags are rarely used as the companies that sell their products has a laptop with bag in a package offering. So it will be less value adding item. Likewise card-holder key-chains are also rarely used by students and working class women.

Overall assessment shows that the best customer segment that the company must focus should be working class women.

<u>Pricing Strategy for Carry Tu Line:</u>

The pricing strategy of the company must be increasing sales oriented which would increase the demand of the product if the purchasing power of the customer is not much high. If the product is differentiated and quality oriented and also that the customer's purchasing power is high enough then the company must charge higher cost to reflect its brand and quality product.

The satchel is widely used by the students and working class women who work in small organizations, hence the company must follow penetration pricing strategy. This is the strategy that will help in covering the fixed cost by earning small contribution on each product. It will also increase the sales which means the total contribution will be enough to cover fixed cost of the organization. This pricing strategy is mostly followed to increase the market share and as in the case of Carry Tu, it is a new entrant in the market, hence pricing low would be helpful in developing customer relation and covering the fixed cost so that the company breakeven in first 8 months of operation.

Overnight bag and laptop bags are mostly used by the working class women who prefer differentiated and quality products. Which means that the product will be differentiated and quality product to compete with Grazzi. The company must follow Competitive pricing strategy so that the customer perceives similar value that Grazzi is offering in the market.

Card-holder key-chains are rarely purchased by working class hence it will also follow penetration pricing strategy to increase its sales and increase the total contribution earned on its sales.

The pricing strategy are based on the market condition of Carry Tu as it is a new entrant in the market and is based on Grazzi brand valued by customers.

7 0
2 years ago
When is humor beneficial to a team?
murzikaleks [220]

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4 0
2 years ago
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zimovet [89]

Answer:

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Explanation:

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I hope my answer helps you

5 0
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The answer is Price Bundling.

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It is also called product bundling or product-bundle pricing. As two or more products are combined/ bundled together to sell them at a lower price.

Hence, when Grande Communications offers a lower price to customers who subscribe to Grande television, telephone, and internet services all at once. This is an example of Price Bundling.

Learn more about Market strategy:

brainly.com/question/21629547

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8 0
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Lelechka [254]

Answer:

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Enterprise software includes a database and thousands of predefined business processes that reflect best practices

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