1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kodGreya [7K]
3 years ago
9

Ms. Aura is a psychic. The demand for her services is given by Q-2000 10P, where Q is the number of one-hour sessions per year a

nd P is the price of each session. Her marginal revenue is MR = 200-0.2Q Ms. Aura's operation has no fixed costs, but she incurs a cost of 150 per session (going to the client's house).
a. What is Ms. Aura's yearly profit?
b. Suppose Ms. Aura becomes famous after appearing on the Psychic Network. The new demand for her services is Q = 2500-5P. Her new marginal revenue is MR = 500-0.4Q. What is her profit now?
c. Advances in telecommunications and information technology revolutionize the way Ms. Aura does business. She begins to use the Internet to find all relevant information about clients and meets many clients through teleconferencing. The new technology introduces an annual fixed cost of 1,000, but the marginal cost is only 20 per session. What is Ms. Aura's profit? Assume the demand curve is still given by Q-2500 -5P.
d. Summarize the lesson of this problem for the superstar phenomenon.
Business
1 answer:
PIT_PIT [208]3 years ago
7 0

Answer:

a)

P 175

Q = 250

Profit6,250

b)

P 325

Q = 875

Profit 153,125

c)

Q = 1200

P = 260

Profit = 287,000

Explanation:

It maximize profit at MR = MC

MR = 200 - 0.2Q

MC = 150

150 = 200-0.2Q

Q = 50/0.2 = Q = 250

Price:

250 = 2000 - 10P

P = 1750/10 = 175

<u></u>

<u>Profit: revenue - cost</u>

$175 x 250 session - $150 per session = 6,250

<em>At new functions:</em>

150 = 500-0.4Q

Q = 350 / 0.4 = 875

Price:

875 = 2,500 - 5P

P = (2500-875)/5= 325

<u>Profit</u>

(325 - 150) * 875 = 153,125

<u>If cost changes:</u>

cost: 1000 + 20Q

marginal cost: 20

20 = 500 - 0.4Q

Q = 480 / 0.4 = 1,200

Price:

1,200 = 2500 - 5P

P = 1300/5 = 260

<u>Profit</u>

(260 - 20)Q - 1,000 = 287,000

You might be interested in
Problem 13-13 A mail-order house uses 18,000 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $9
uranmaximum [27]

Answer:

A. 5,000 boxes per order

B. 3.6 orders per yr

Explanation:

See attached file

4 0
3 years ago
Three years ago, you invested $3,350.00. Today, it is worth $4,100.00. What rate of interest did you earn
Anastasy [175]

Answer:

6.97%

Explanation:

the formula to be used is

The formula for calculating future value:

FV = P (1 + r)^n

FV = Future value  

P = Present value  

R = interest rate  

N = number of years  

$4,100.00 = $3,350.00 x ( 1 + r)^3

divide both sides of the equation by $3,350.00

$4,100.00 / $3,350.00 = ( 1 + r)^3

1.223881 = ( 1 + r)^3

find the cube root of both sides

1.069661 = 1 + r

r = 6.97%

7 0
3 years ago
In 2022 the Splish Brothers Inc. had net credit sales of $1020000. On January 1, 2022, the Allowance for Doubtful Accounts had a
zaharov [31]

Answer:

$35,300 (Credit)

Explanation:

Given that;

Allowance = 10% × $242,000 = $24,200

Amount written off of $34,200 would have made the balance in the allowance for doubtful debts

= $34,200 - $23,100

= $11,100 (Debit)

However, the balance in the account at the end of the year should amount to $24,200 hence the adjustment required

= $24,200 + $11,100

=$35,300 (Credit)

5 0
3 years ago
Kuzio Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Sell
sladkih [1.3K]

Answer:

Effect on income= $9,600 increase

Explanation:

Giving the following formula:

Unitary contribution margin= $90

The marketing manager believes that a $7,500 increase in the monthly advertising budget would result in a 190 unit increase in monthly sales.

<u>To calculate the effect on income, we need to use the following formula:</u>

Effect on income= increase in total contribution margin - increase in fixed costs

Effect on income= 190*90 - 7,500

Effect on income= 17,100 - 7,500

Effect on income= $9,600 increase

3 0
3 years ago
Departmental overhead rates may not correctly assign overhead costs due to:
Vika [28.1K]

Answer:C.overreliance on volume as a basis for allocating overhead costs where products differ regarding the number of units produced, lot size, or complexity ofproduction.

6 0
3 years ago
Other questions:
  • Reasons why estimating time and cost are important include all of the following EXCEPT:_________
    11·1 answer
  • The distribution of the amount of money in savings accounts for florida residents has an average of 2,200 dollars and a standard
    8·1 answer
  • Which choice best describes differences in corporate decision-making
    10·1 answer
  • Heather is an HR specialist at McCoy Manufacturing, where she is responsible for making sure HR policies and transactions delive
    9·1 answer
  • Let's assume that your favorite musician (who sells platinum records and has sold-out concerts) is a great cook. He also makes s
    9·1 answer
  • For each of the transactions in items 2 through 13, indicate the two (or more) effects on the accounting equation of the busines
    11·1 answer
  • Nelson Ovalles worked as a cable installer for Cox Rhode Island Telecom, LLC, under an agreement with a third party, M&amp;M Com
    6·1 answer
  • In QuickBooks Online, the Products and Services list contains the items that will appear on your client's purchase and sales tra
    15·2 answers
  • Data entered into a computer is called a...
    12·1 answer
  • Poppy co. uses a periodic inventory system. beginning inventory on january 1 was understated by $30,000, and its ending inventor
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!