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Marginal Cost & Revenue for Company Yes

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Provided the following cost and income information for a period of time for the company Yes company selling their product in a market where it even is a heavy market player:

Production Interval Difference Unit Cost Difference Unit Revenue
0- 1 000 units $ 2 800 $ 4 000
1 001 - 2 000 units $ 2 800 $ 3 600
2 001 - 3 000 units $ 2 800 $ 3 200
3 001 to 4 000 units $ 2 800 $ 2 800
4 001 - 5 000 units $ 2 800 $ 2 400
5 001 - 6 000 units $ 2 800 $ 2 000
6 001 to 7 000 units $ 2 800 $ 1 600

Fixed cost is $ 4 000 000 per period:

A) Set up a unit chart with curves for the differential unit costs, differential unit revenue, and total unit sales price

B)Find the optimum amount of gain and maximum profit based on unit graph.

C)The company has so far only sold the product in a protected domestic market. Now it opens up an opportunity to sell the product on the international market. Here is a small company market player. The company in this market must adapt to the particular market at $ 3 200 Find the distribution between domestic market and export market is the most profitable for the company. Calculate how much profit is by this distribution

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Solution Summary

The expert examines marginal cost and revenues for company Yes.

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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