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In consultation with members of the economics department at a local college the marketing department has...

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General Management

In consultation with members of the economics department at alocal college the marketing department has been able to gain someinsight into the elasticity of demand for the higher qualityproduct.

In addition, members of the faculty in the materials andlogistics department were able to incorporate various economies ofscale into the cost estimates. The fixed costs for different sizeprocesses as well as the variable cost information is presentedwith the sales information in table 1.

Table 1

Parameters for Alternative Sales Volumes (Process 1 only)

Option

Number

Selling

Price

Sales

Volume

Fixed

Cost

Variable

Cost/unit

1

$25

30,000

$60,000

$16.5

2

22

40,000

90,000

15

3

18

60,000

100,000

14

4

15.5

80,000

150,000

13.5

5

14.5

110,000

150,000

13

A. What should Goliath do and how much money will they make iftheir goal is to make as much money as possible?

B. What should Goliath do and how much money will they make iftheir goal is to maximize their return on investment?

C. What should Goliath do and how much money will they make iftheir goal is maximize their market share?

Answer & Explanation Solved by verified expert
4.5 Ratings (680 Votes)
Calcuate Total Revenue Total Cost Fixed Variable and TotalProfit for each optionTotal Revenue Sales Volume    See Answer
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