Price, Cost, and Profit Analysis


Now that you have examined whether your firm is in a competitive industry, let’s take a look at some questions related to price, cost, and profit analysis.

Question 2: At the profit-maximizing level, what is the relationship between marginal cost, marginal revenue, price, and average cost for firms in competitive and oligopolistic industries?

The CFO has provided the following information to you:

  • fixed costs for the MiniZ are $2.75 million
  • variable cost per unit is $200

She wants you to analyze the fixed and variable costs, optimal level of production, and profit for the MiniZ component.

Question 3: Find Q, P, average cost, and profit for the MiniZ at the profit-maximizing level. (Again, the demand function for the MiniZ is: Q = 50,000 – 25*P.)

Submit your Price, Cost, and Profit Analysis Report and Calculations to the dropbox below. Be sure to show your calculations in Excel and provide a narrative analysis in PowerPoint. Your narrative analysis should summarize the results of your analysis and make recommendations for the benefit of company.

Before you submit your assignment, review the competencies below, which your instructor will use to evaluate your work. A good practice would be to use each competency as a self-check to confirm you have incorporated all of them in your work.

  • 3.1 Identify numerical or mathematical information that is relevant in a problem or situation.
  • 3.2 Employ mathematical or statistical operations and data analysis techniques to arrive at a correct or optimal solution.
  • 3.3 Analyze mathematical or statistical information, or the results of quantitative inquiry and manipulation of data.
  • 3.4 Employ software applications and analytic tools to analyze, visualize, and present data to inform decision-making.
  • 10.1 Apply relevant microeconomics principles to support strategic decisions for the organization.
  • 10.2 Analyze financial statements to evaluate and optimize organizational performance.

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