KopyKat Is a Firm That Specializes in Printing Business Cards

question 44

Essay

KopyKat is a firm that specializes in printing business cards and résumé's, using the latest laser technology. The manager has estimated that weekly demand can be approximated by P = 25 - .001Q, where P is price and Q is output per week. The firm's cost function is C = 25,000 + 13Q + .002Q², where C is total cost.
(a) Determine the firm's profit maximizing price and output.
(b) The night supervisor believes that extending KopyKat’s hours by two hours in the evening would substantially increase volume. The manager is willing to stay open for two hours over the next three months as an experiment. What results would lead the manager todecide if the store can remain open later in the evening on a permanent basis?
(c) A former employee decides to sue KopyKat, alleging employment discrimination. Although management claims innocence, they agree to settle out of court. The settlementrequires KopyKat to pay the employee $10,000 per month for the next year. Determine the optimal price and output for the firm under these new conditions.

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Definitions:

Consumption Decisions

Choices made by individuals or households on purchasing goods and services with their available income.

Current Income

Income received by an individual or entity within a specified period of time, such as wages, salaries, or investment income.

Average Income

The amount of income earned per person in a given area or country, calculated by dividing the total income of a population by the number of people in that population.

Bush Administration

Refers to the presidency of George H.W. Bush (1989-1993) or George W. Bush (2001-2009) in the United States, each leading with distinct policies and historical impacts.