0
   

Maximization of Volume of Sale of a firm

 
 
Reply Thu 25 Aug, 2016 12:12 pm
Let a farm wants to maximize volume of sales subject to some fix cost (F), some wage cost (WL) and some advertisement cost.

1. Try to use the logical optimization process to derive Producer’s Equilibrium.

2. Do you think that always high advertisement cost leads to higher sales? If it is true, explain logically and if it is not true, explain the limitations of this link.
  • Topic Stats
  • Top Replies
  • Link to this Topic
Type: Question • Score: 0 • Views: 777 • Replies: 3
No top replies

 
cicerone imposter
 
  1  
Reply Thu 25 Aug, 2016 05:36 pm
@mukchayan,
Have you ever studied differential calculus? We had a course in college, but that was over 50 years ago. It's a good skill to learn when trying to figure out the best option on known fixed costs such as labor, storage, advertising, and other associated costs.

Differential calculus - Wikipedia, the free encyclopedia
https://en.wikipedia.org/wiki/Differential_calculus
In mathematics, differential calculus is a subfield of calculus concerned with the study of the rates at which quantities change.
mukchayan
 
  1  
Reply Sat 27 Aug, 2016 04:53 am
@cicerone imposter,
cicerone imposter,
I have a fair knowledge of calculus (Diff/Int). But, the basic prob for me is to conceptualize Marco economics that I have never studied before. Smile
cicerone imposter
 
  1  
Reply Sun 28 Aug, 2016 05:39 pm
@mukchayan,
If you know what all of your fixed costs are including overhead, you should be able to determine minimum and maximum sales price to find out the demand for the product at any given price.
Most cost of goods sold hovers around 50%.
If you understand standard cost, you'll be able to determine where to price the product. As a consultant, I have established standard cost systems for several retail businesses. It makes it easy to determine gross profit and to take inventory.
0 Replies
 
 

Related Topics

Who or What is Responsible? - Discussion by Merry Andrew
Debt ceiling? - Question by Buffalo
The Legacy of the Reagan Revolution - Discussion by Cycloptichorn
Let it crash - Discussion by FreeDuck
No real limits to growth - Discussion by gungasnake
Sovereign debt - Question by JohnJD
Wage discrimination - Question by zewittykitty
Central Bank Operations? - Question by NewToEcons
Frictional unemployment vs structural - Question by MateuszJanczura
 
  1. Forums
  2. » Maximization of Volume of Sale of a firm
Copyright © 2024 MadLab, LLC :: Terms of Service :: Privacy Policy :: Page generated in 0.03 seconds on 04/18/2024 at 10:30:27