Solved

KopyKat Is a Firm That Specializes in Printing Business Cards

Question 43

Essay

KopyKat is a firm that specializes in printing business cards and résumé's, using the latest laser technology. The manager has estimated that weekly demand can be approximated by P = 25 - .001Q, where P is price and Q is output per week. The firm's cost function is C = 25,000 + 13Q + .002Q2, where C is total cost.
(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 the manager todecide if the store can 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 settlementrequires KopyKat to pay the employee $10,000 per month for the next year. Determine the optimal price and output for the firm under these new conditions.

Correct Answer:

verifed

Verified

The payment of $10,000 per month represe...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents