Search
Sign In / Sign Up for FREE
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

# Managerial Economic and Quantitative Analysis - Essay Example

Comments (0)
Summary
Managerial Economic and Quantitative Analysis Author Institution Part One Given the demand and cost functions of the two companies, it is possible to calculate the optimal quantity and price in two different cases; where the firms work together and where the firms work individually…
Download full paper
Read TextPreview

## Extract of sampleManagerial Economic and Quantitative Analysis

Download file to see previous pages... Thomas & Maurice, 2007). So in order to obtain the profit equation, total cost equation is subtracted from the total revenue equation (that is, profit = total revenue – total cost). However, from the equations given, there is no total cost and total revenue function. In order to obtain a total revenue function of the two firms, the demand function of each firm is integrated, and in order to obtain the total cost of each firm, the average cost function of each firm is integrated. After obtaining the total revenue and total cost functions, it is now possible to obtain the profit function. Economists argue that profits are maximized where total cost balances total revenue. So in order to obtain optimal price and output of each firm working individually, the total cost function is equated to the total revenue function (R. Thomas, C. Thomas & Maurice, 2007). This helps in obtaining the optimal output and price. Optimal price and output may also be obtained through differentiating the profit function of each firm and equating it to zero, and then solving for the values of price and output. Consider the second case, where the two companies work together. ...
Thomas, C. Thomas & Maurice, 2007). Part Two Estimation of the price per plane The estimated price per plane is as follows. price per plane (million \$) probability Estimated price per plane (million \$) 125 0.25 500 175 0.25 700 225 0.5 450 Optimal output and price when the firms act individually Airbus optimal price and output Airbus demand function is P = 500 – 0.0003Q. From this demand function, the total revenue function derived by integrating the demand function is TR = 500Q – 0.0003Q2. Airbus has the following Average cost function; AVC = 104.8822Q – 0.001Q2 + 0.09 Q3. By integrating this average cost function, a total cost function is obtained; TC = 104.8822Q2 – 0.001Q3 + 0.09Q4. In order to determine the optimum quantity and price the profit function is obtained first and then differentiated with respect to output. The profit function obtained is 500Q – 104.8825Q2 + 0.001Q3 – 0.09Q4. Differentiating this profit function and solving for the value of Q yields the value of Q as 500 M. Hence, substituting the value of Q in the original demand function, the value of P obtained is \$ 499.85 M. thus; the optimal values of price and output are \$ 499.85 Million and 500 million respectively. Boeing Optimal Output and Price The demand function of the firm is P = 700 – 0.00013Q. The total revenue function obtained through integration of the demand function is TR = 700Q – 0.00013Q2. The Average cost function of the firm is AVC = 25.8678Q – 0.00023Q2 + 0.4Q3. Integration of this function yields TR = 25.8678Q2 – 0.00023Q3 + 0.4Q4. From the total revenue and total cost functions, the following profit function is obtained, which is then differentiated and equated to zero in order to obtain the value of Q that is ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Quantitative analysis
In the time series analysis, various other tools and techniques are available that make it a powerful tool in itself for the analytical processes that are quantitative in nature. As the name implies, this form of observation is based on gathering various items monitored constantly and through repetitive measurements.
9 Pages(2250 words)Essay
Finance - Managerial Accounting
The Institute of Management Accountants has defined managerial accounting as “the process of identification, measurement, accumulation, analysis, preparation, interpretation, and communication of financial information used by management to plan, evaluate, and control within an organization and to assure appropriate use of and accountability for its resources” (qtd in Davis & Davis, 3).
3 Pages(750 words)Essay
Quantitative Analysis
It can be suggested to reduce unit costs and increase revenues. But decline in domestic passenger flying did made an offset in the revenues. So further cost reduction and revenue enhancement is needed keeping in view the 'stimulators' and diverters. Without dissatisfying the diverters and not loosing the stimulators the plan must be in a comprehensive manner addressing all the problems of marketing and fare structure including the cost effects.
15 Pages(3750 words)Essay
Managerial Finance
Accounting is the process of identifying, measuring, handling and communicating the financial information about different economic entities for being used by the concerned parties. How this information is used by the company and the persons handling the information helps in classifying it in managerial and financial accounting.
6 Pages(1500 words)Essay
Global Managerial Economic
The NAFTA also calls for the gradual phasing out of tariffs and the removal of restrictions on goods produced by motor vehicle and automotive parts, computers, textiles, and agriculture industries. The agreement also stressed the
3 Pages(750 words)Essay
Managerial economic
A second reason is to improve the skills and capabilities of the person. A third reason to pursue an MBA degree is to have a better chance to obtain a promotion in the workplace. A fourth reason to pursue an MBA degree is change career paths such
1 Pages(250 words)Assignment
Managerial Decisions in Economic Terms
Both alternatives involve their respective costs, which have been discussed at length. Both cases have their own set of pros and cons. This has been explained under the head ‘Factors or Costs’. It is seen that a number of variables come into play while deciding
8 Pages(2000 words)Essay
Quantitative Analysis for Finance
The outcomes predicted by SPSS, find that every pair of tourist revenue variables, i.e., (REVFRANH, REVFRANB), (REVFRANB, REVGERMB)
4 Pages(1000 words)Essay
Managerial Economic - Assignment # 2
Changes in cost; fixed cost remained unchanged as they acquired the premier league rights as operation cost increased to addition of channels while marginal cost increased as the company had to acquire an extra channel as they decided to broadcast on its own sports (Hubbad &
1 Pages(250 words)Assignment
Managerial Analysis
The author states that raw materials of all types are originally entered into an inventory asset account with a credit to the corresponding accounts payment account and a debit to the raw materials inventory account. During the consumption of the raw materials, the accounting treatment varies, depending on their status as indirect or direct raw materials.
1 Pages(250 words)Essay
Let us find you another Essay on topic Managerial Economic and Quantitative Analysis for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
• About StudentShare
• Testimonials
• FAQ
• Blog
• Free Essays
• New Essays
• Essays
• The Newest Essay Topics
• Index samples by all dates
Join us:
Contact Us