THE ENVIRONMENT OF BUSINESS AND THE TOOLS OF MANAGERIAL ECONOMICS

PROBLEM You are the owner of a business that sells premium natural-organic soap. Your goal is to decide the number of soap (8) to be manufactured per month to maximize prots. The total benets (revenues) and costs of manufacturing different quantities of soap are given in the table below. Control Total Benets Total Costs Variable S B S C S D 1 2 3 4 5 6 7 8 9 . 10 1,100 550 1. Use the marginal analysis technique to determine the quantity of soaps that will maximize net benets. Present results in table form and highlight the maximizing level. 2. Graphically illustrate letter B. Separate the graphs for TB TC approach, MB: MC rule and net benet (maximum). The sequence of the graph. (1) TB TC approach (topmost graph); (2} net benet (middle graph); and (3) ME, MG, 8: MNB (last, 3rd graph). But be sure that the graphs are parallel in Xaxis so as to be consistent in the results. (Label your graphs accordingly and appropriately.)