Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

KopyKat specializes in printing business cards and rsum's, using the latest laser technology. After analysis of the business, the manager has determined that weekly demand

KopyKat specializes in printing business cards and rsum's, using the latest laser technology. After analysis of the business, the manager has determined that weekly demand can be approximated by P=25-.001Q. The firm's cost function is C=25,000+13Q+.002Q2, where Q is output per week.

a) Determine the firm's profit maximizing price and output.

b) The night supervisor believes that extending KopyKat's hours by two hours in the evening would substantially increase volume. The manager is willing to stay open for two hours over the next three months as an experiment. What results would lead you to recommend that the store remain open later in the evening on a permanent basis?

c) A former employee decides to sue KopyKat, alleging employment discrimination. Although management claims innocence, they agree to settle out of court. The settlement requires KopyKat to pay the employee $10,000 per month for the next year. Determine the optimal price and output for the shop under these new conditions.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Legal Environment

Authors: Jeffrey F Beatty, Susan S Samuelson

3rd Edition

0324537115, 9780324537116

More Books

Students also viewed these Economics questions

Question

6. How can hidden knowledge guide our actions?

Answered: 1 week ago