Discussion Question 9: How would you react to a sales manager’s
announcement that he or she has in place a marketing program to
maximize sales?
Problem 1(a): Given the following total-revenue function: TR=9Q-
Q2(a) Derive the total-, average-, and marginal- revenue schedules
from Q=0 to Q=6 by 1’s.
Problem 7: Given the following total-cost schedule, Derive the
average-and marginal-cost schedules
Problem 9: With the total-revenue curve of Problem 1 and the total-
cost curve from
Froeb et al.’s Chapter 4:
a. Individual problems: 4-5 and 4-6.
Individual problem 4-5: Your new insurance firm processes claims
through its newer, larger high-tech facility and its older, smaller
low-tech facility. Each month, the high-tech facility handles 10,000
claims, incurs $100,000 in fixed costs and $100,000 in variable
costs. Each month, the low-tech facility handles 2,000 claims, incurs
$16,000 in fixed costs and $24,000 in variable costs. If you
anticipate a decrease in the number of claims, where will you lay off
workers?
Individual problem 4-6: A copy company wants to expand
production. It currently has 20 workers who share eight copiers.
Two months ago, the firm added two copiers, and output increased
by 100,000 pages per day. One month ago, they added five workers,
and productivity also increased by 50,000 pages per day. Copiers
cost about twice as much as workers. Would you recommend they
hire another employee or buy another copier?
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