Economics-Analysis-for-Management-Decision―Homewor

M1212092吴吟龙1121209316CourseName:EconomicsAnalysisforManagementDecisionInstructor:___GenyuanZHONG_______Class:_______M1212092________中国全球运营领袖项目ChinaLeadersforGlobalOperationsCoverSheetForIndividualassignmentStudentID___1121209316__StudentName____吴吟龙_____ForGroupassignmentGroupmemberContributionSignatureGroupmemberContributionSignature1.6.2.7.3.8.4.9.5.10.Score:_________Grade:_________Comments:ProfessorSignature:______________Date:______________1/5M1212092吴吟龙1121209316AntaiCollegeofEconomicsandManagementShanghaiJiaotongUniversityDepartmentofEconomicsGenyuanZHONGHOMEWORKSET#2YourcompletedhomeworkisdueinclassormaybeplacedinZhonggenyuan’sboxforyoursection,whichwillbelocatedinAntaiBvldfloor2,before5:30p.m.Latehomeworksetswillnotbecorrectedandreceivepartialcredit,ifany.1.YouaretheadvisorofUnityCar,acompanythatprovidespartiallyassembledautomobilecomponentstoPackard,amajorautomobilemanufacturer.TheyhavejustreceivedarushorderfromPackard,offeringtopay$160perunitforthefirst500units,and$120perunitthereafter.Whatwouldbeyourrecommendationstothecompany?RemembertoexplainhowmanyunitsUnityCarshouldproduce(assumingthatyoucanonlyproduceamultipleof100andthattherushorderisUnityCar’sonlyproduction)andatwhatprofits/loss.Inyouranswer,commentoneachofthestatementsusingyourknowledgeofthefirm’scostschedules.Accepttheofferandproduce600unitsfor-Itisashorttermdecision,weshouldaccepttheorderwheneverthePriceisoverAVC-WhentheMC=price,thequantityweproducecouldmakeusthemostprofit.SinceUnityCarcanonlyproduceinmultiplesof100,wehavetopickupaproductionquantitysothattheMCisnearbutbelowtheprice,wherethequantityturnsouttobe600.-ThecalculationofMC,AVCcouldbefoundinthetablebelow,whereoAVC=VariableCost/UnitsoMC=(VariableCost[n]-VariableCost[n-1])/(Units[n]-Units[n-1])Abouttheargument-UnityCarshouldturntheorderdownbecausePackardisnotpayingenoughFor500unitstheunitpricePackardofferedisoverAVCsotheordershouldbetaken.-Producing500units,theaveragecostswouldbelowerthanthepricingofferedbyPackard,butthiswouldn’tbetrueat600units.Therefore,UnityCarshouldagreetoproduce500units.IDUnitsVariableCostFCAVCACMCUnitPriceAveragePriceRevenueGrossMarginNetProfit11005,00030,00050.0350.050160160.01600011,000-19,000220015,00030,00075.0225.0100160160.03200017,000-13,000330024,00030,00080.0180.090160160.04800024,000-6,000440033,00030,00082.5157.590160160.06400031,0001,000550043,00030,00086.0146.0100160160.08000037,0007,000660054,00030,00090.0140.0110120153.39200038,0008,000770067,00030,00095.7138.6130120148.610400037,0007,000880083,00030,000103.8141.3160120145.011600033,0003,0009900103,00030,000114.4147.8200120142.212800025,000-5,000101,000128,00030,000128.0158.0250120140.014000012,000-18,0002/5M1212092吴吟龙1121209316WeshouldnotcomparepricewithACorAVCbutMCtofindthemostprofitablequantity.Sothequantityshouldbe600.-Thereisapossibilitytonegotiateapriceof$160foreachunit.Inthatcase,UnityCarwouldproduce1000units,sinceAverageCostsforthatproductionlevelwouldbe$158.Ifthepricecouldbenegotiatedto$160,itisobviouslygoodbutthequantityweshouldproducewouldnotbe1000unitsbut800unitsinsteadwhereMC=Price=1602.YouhavethefollowinginformationaboutthethreeelectricitygenerationplantsinCleanland.SourceCapacity(inGW-hour)MarginalCost(C$/GW-hour)1.Coal4.61,3102.Gas2.71,8603.Oil2.01,730(C$=Cleanlanddollars)Thedemandforelectricityvariesdependingontheseason.Cleanlandhastwoseasons:DryandWet.Arecentestimationofthedemandisasfollows:Dry:Q=14.25–0.005PWet:Q=18.3–0.005P(QuantitiesexpressedinGW-handpricesinC$/GW-h)Youcanassumethattheelectricitymarketisperfectlycompetitive(andthatsupplyanddemandareconstantovertheday).a.Drawagraphshowingthesupply-demandequilibriumforeachseason.Whatwouldbethepricepaidbyconsumersineachseason?Whatwouldbethesurplusofeachplant?Whatwouldbetheconsumersurplus?ThegraphisattachedasfollowSolvetheequationsforDryandWetSeason05001,0001,5002,0002,5003,0003,5004,000012345678910Supply-DemandCostDryWet3/5M1212092吴吟龙1121209316Dry�Q=14.25–0.005P𝑃𝑃=�1,310Q≤4.61,7304.6Q≤6.61,8606.6Q≤9.3=�Q=5.6P=1730where�Q1=4.6Q2=0Q3=1Wet�Q=18.3–0.005P𝑃𝑃=�1,310Q≤4.61,7304.6Q≤6.61,8606.6Q≤9.3=�Q=9P=1860where�Q1=4.6Q2=2.4Q3=2ForDrySeason⎩⎪⎨⎪⎧SurplusPlant1=4.6*(1730−1310)=1932SurplusPlant2=0*0=0SurplusPlant3=1∗(1730−1730)=0CS=12∗�14.250.005−1730�∗5.6=3136ForWetSeason⎩⎪⎨⎪⎧SurplusPlant1=4.6*(1860−1310)=2530SurplusPlant2=2.4*(1860-1860)=0SurplusPlant3=2∗(1860−1730)=260CS=12∗�18.30.005−1860�∗9=8100Igathertheanswersasthetablebelow:b.Assumethatthegovernmentimposesataxontheoilusedasaninputforelectricitygeneration.Thistaxraisesthemarginalcostofthisplantby20%.Howwillthismeasureaffecttheproducersandconsumers?Howdoyouthinkthatthedifferentproducersandtheconsumerswillreacttothistax?Solvethesameequationasthepreviousquestionbutnoticethatthecostoftheplant3Oilhaschangedto1730*1.2=2076sowehave:ConsumerPriceSurplusofPlant1SurplusofPlant2GasSurplusofPlant3OilConsumerSurplusDrySeason17301932003136WetSeason186025300260810005001,0001,5002,0002,5003,0003,5004,000012345678910Supply-DemandCostDryWet4/5M1212092吴吟龙1121209316𝑃𝑃=�1310Q≤4.618604