Supply Curve Analysis

question 46

Essay

Supply Curve Analysis. Credible Switches, Inc., is a distributor of generic safety switches used in the washing machines and dryers. Based on an analysis of monthly cost and output data, the company has estimated the following relation between the marginal cost (wholesale cost plus distribution cost per unit) and monthly output:

A. Calculate marginal cost at 400,000, 500,000, and 600,000 units of output.
B. Express output as a function of marginal cost. Calculate the level of output at which MC = $5, $8, and $10.
C. Calculate the profit-maximizing level of output if prices are stable in the industry at $8 per switch and, therefore, P = MR = $8.
D. Again assuming prices are stable in the industry, derive CSI's supply curve for switches. Express price as a function of quantity and quantity as a function of price.

---

Definitions:

High Self-monitors

Individuals who are highly sensitive to social cues and adjust their behavior accordingly to fit in with their surroundings.

External Cues

Environmental signals or indicators that can influence behavior and decision-making processes.

Situational Contingencies

External factors or conditions that influence the outcome of a decision or action, suggesting that the effectiveness of a response may depend on the specific circumstances.

Authoritarian Personality

A personality type characterized by adherence to strict obedience and control over those perceived as lower in status, often valuing order and tradition over freedom.