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Sun 30 Apr, 2017 03:42 pm
Hello, fellow economists,
I am having trouble figuring out this question, could someone help out please? There's an excel file needed too, but would really appreciate anyone who is willing to help! The question is as follows below!
Today’s date is June 31, 2016. You work for Viridis Food Company. Your firm has a
monopoly in the market for Turktack, a disgusting foodstuff made from turkey, corn,
and water. In order to make 1 package of Turtack, your company needs 1.00 pound
of turkey, 0.25 bushels of corn, and 3.00 gallons of water.
Viridis has a long-term water contract with its local municipality. The firm can
purchase as many gallons of water as it wants at a constant price of $0.10 per gallon.
Turkey and corn must be purchased in the nationwide, U.S. market for turkey and
for corn. Viridis can purchase as many pounds of turkey as it wishes at a constant
price equal to the U.S. price per pound for turkey. Likewise, Viridis can purchase
as many bushels of corn as it desires at a constant price equal to the U.S. price per
bushel for corn.
Your boss comes to your cubicle. First, she tells you that she’s posted some historical
price and sales data in your content folder in D2L. Then she says, “In July, we want
to charge a uniform price per package for Turktack that will maximize our profit.”
She tasks you with determining what this price should be. Before she leaves, she gives
you a final instruction: “Always use a 6-month moving average model to estimate
next month’s costs!” Then she’s gone.