ECO Assignment – Melon Enterprise / hwaid.com
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Question 1
The Total Cost for 20 years is 100x + 20x =120x
The demand curve therefore is r=70-0.001s
Total Revenue within 20 years is 20rs – 1200s -0.02s2
Profit =(1200s-0.02s2)-120s = 1080s – 0.02s2
The maximum amount of profit is ds = 0
1080-0.04s = 0
s=1080*0.04=27,000 sq.m
Case 2: Demand Curve is r= 60-0.002s
The Total revenue for 20 years is 1000s – 0.002s2
Profit = (2000s – 0.04s2)-140s – 88s – 0.04s2
The optimal size of the shopping center is based on the revenue obtained and the utility obtained The number of attendants is monopoly of course representing the interests of the fans and the participants and the center is smaller than the number of fans in the competitive free-entry market equilibrium.
Question 2
The maximum amount that Melon will be willing to pay is the price of the Native State essentially, this is the economic profit that can compensate Melon.
Question 3
Total Profit = Total Revenue – Total Cost
TR = 60 – 0.001s
=TR-TC
Quantity = 10,000
Price = $30 each
Total Cost = $240,000
Total Revenue = $300,000
Total Profit = $60,000
Question 4
Hiring Roland in doing some additional market research obviously would provide a better estimate for the retail space because of the extensive experience in cost estimations and cost analysis.
Question 5
The best option would be for Melon to lease the shopping center this will reduce the cost by at least 600%. Another option would be to hire Roland Thomas so as to offer a better Market research they would assist the business in reducing cost of doing business and offer better opportunities of marketing the products as well as reduced cost of maintenance of the shopping center. Considering that Roland Thomas forecasted a demand curve r=60-0.001s or r = 50 – 0.0.01s