Suppose You Are the Manager of Alpha Enterprises,a Firm That

question 66

Essay

Suppose you are the manager of Alpha Enterprises,a firm that holds a patent that makes it the exclusive manufacturer of bubble memory chips.Based on the estimates provided by a consultant,you know that the relevant demand and cost functions for bubble memory chips are Q = 25 - 0.5P; C = 50 + 2Q.
a.What is the firm's inverse demand function?
b.What is the firm's marginal revenue when producing four units of output?
c.What are the levels of output and price when you are maximizing profits?
d.What will be the level of your profits?

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Definitions:

DSO

Days Sales Outstanding, a measure of the average number of days it takes a company to collect payment after a sale has been made.

Credit Department

A division within a financial institution or company responsible for assessing credit risk and approving credit to customers.

Aging Schedule

An aging schedule is a table that shows the breakdown of accounts receivable into categories by length of time outstanding, often used to assess the collectibility of receivables.

Inventory Turnover Ratio

A metric indicating how many times a company's inventory is sold and replaced over a given period.