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A Product Is Currently Made in a Process-Focused Shop, Where

question 49

Essay

A product is currently made in a process-focused shop, where fixed costs are $8,000 per year and variable cost is $40 per unit. The firm currently sells 200 units of the product at $200 per unit. A manager is considering a repetitive focus to lower costs (and lower prices, thus raising demand). The costs of this proposed shop are fixed costs = $24,000 per year and variable costs = $10 per unit. If a price of $80 will allow 400 units to be sold, what profit (or loss) can this proposed new process expect? Do you anticipate that the manager will want to change the process? Explain.

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Definitions:

Price Comparisons

The act of evaluating the prices of similar products or services from different vendors or stores.

Online Classified Ads

Web-based advertisements placed on specialized platforms that allow users to buy, sell, or trade goods and services.

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Consumer-to-Consumer Electronic Commerce involves transactions of goods and services between consumers, facilitated by third-party platforms like eBay or Craigslist.

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A specific identifier, often an IP address or domain name, that is used to locate and access a server over a network.

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