This analysis is for graduate level Operations Managment course.

Consider the mathematical model for point of indifference:

Company XYZ is considering a location move. The selling price of $10 per customer will stay the same. The company's goal is to make money now and in the future.

1. How many customers do you need to invest in the new fixed cost of $12,000 and move to the new location?

2. What is the difference between a breakeven point model and the point of indifference model?

Solution Preview

This analysis is for graduate level Operations Managment course.

Consider the mathematical model for point of indifference:

Company XYZ is considering a location move. The selling price of $10 per customer will stay the same. The company's goal is to make money now and in the future.

1. How many customers do you need to invest in the new fixed cost of $12,000 and move to the new location?

2. What is the difference between a breakeven ...

Solution Summary

This solution shows step-by-step calculations to determine the fixed cost with respect tot he variable cost and factor x, and it also differentiates between the breakeven point model and the point of indifference.

Is a consumer better off at a lower point on a higher indifference curve than a higher point on a lower indifference curve? I understand the answer is yes, but I dont understand why....Need a detailed explanation...

Assume you have a restaurant in operation and the property owner has offered a 5-year lease rental of $42,000 per year or a variable lease rental of 10% of your sales revenue. Your current sales revenue in the new year is projected to be 505,000. Find the indifferencepoint (the break even point of sales revenue at which the f

Given the following information, DESCRIBE the budget line for the consumer: Be sure to state what the axes are and provide numbers for the vertical and horizontal intercepts. Also what is the slope of the line? Explain what the budget line represents.
Income =$1000/ month
Price of 1 pound of steak = $4.00
Price of 1 pound

Emco Products has a present capital structure consisting only of common stock (10 million shares). The company is planning a major expansion. At this time, the company is undecided between the following two financial plans (assume a 40 percent marginal tax rate):
Plan 1 (Equity financing). Under this plan, an additional 5 milli

See the attached diagram. A consumer is in equilibrium at point A. The price of good X is $5.
a) What is the price of good Y?
b) What is the consumer's income?
c) At point A, how many units of good X does the consumer purchase?

10. The consumer's utility function is U=4 square root of X1 + X2. This means that the MRS at the bundle (x1, x2) is 2/square root of X1. Show that the individual's indifference curves have the diminishing MRS property.

Given the following information, describe the budget line for the consumer. Be sure to label the axis and provide a number for the vertical and horizontal intercepts. State the slope and its meaning.
Income =$1000/ month
Price of 1 pound of steak = $4.00
Price of 1 pound of potatoes = $0.50
Now, overlay several indiffe

1. What entity establishes a price ceiling and does it require government sanction for violators? Will it result in a surplus or a shortage?
2.Does the marginal rate of substitution increase or decrease as a point moves downward and to the right along a given indifference curve?

Attached are 2 utility functions that I'm having trouble with.
Problem 3
For each of the following utility functions, draw indifference curves for utility level 12 and 16. Indicate three bundles on each of these indifference curves by specifying the coordinates of each bundle. Shade the weakly preferred set of bundles you