5. problems and applications q5 consider the relationship between monopoly pricing and the price elasticity of demand. if demand is inelastic, total revenue would increase when a monopolist its price. as a result, total cost would . therefore, a monopolist will produce a quantity at which the demand curve is inelastic. use the purple segment (diamond symbols) to indicate the portion of the demand curve that is inelastic. (hint: the answer is related to the marginal-revenue (mr) curve.) then use the black point (plus symbol) to show the quantity and price that maximizes total revenue (tr). inelastic demand max tr 0 1 2 3 4 5 6 7 8 9 10 10 9 8 7 6 5 4 3 2 1 0 -1 -2 -3 -4 -5 price quantity demand marginal revenue

Afirm that makes electronic circuits has been ordering a certain raw material 250 ounces at a time. the firm estimates that carrying cost is i = 30% per year, and that ordering cost is about $20 per order. the current price of the ingredient is $200 per ounce. the assumptions of the basic eoq model are thought to apply. for what value of annual demand is their action optimal?

Pennewell publishing inc. (pp) is a zero growth company. it currently has zero debt and its earnings before interest and taxes (ebit) are $80,000. pp's current cost of equity is 10%, and its tax rate is 40%. the firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00. refer to the data for pennewell publishing inc. (pp). pp is considering changing its capital structure to one with 30% debt and 70% equity, based on market values. the debt would have an interest rate of 8%. the new funds would be used to repurchase stock. it is estimated that the increase in risk resulting from the added leverage would cause the required rate of return on equity to rise to 12%. if this plan were carried out, what would be pp's new value of operations? a. $484,359 b. $521,173 c. $584,653 d. $560,748 e. $487,805

Turrubiates corporation makes a product that uses a material with the following standards standard quantity 8.0 liters per unit standard price $2.50 per liter standard cost $20.00 per unit the company budgeted for production of 3,800 units in april, but actual production was 3,900 units. the company used 32,000 liters of direct material to produce this output. the company purchased 20,100 liters of the direct material at $2.6 per liter. the direct materials purchases variance is computed when the materials are purchased. the materials quantity variance for april is: