phablet

Part 1:

Phablet Inc. is the new innovative company that’s revolutionizing technology as we know it by offering a new tablet that also acts as a source of energy through solar power. For now, the company’s target demographic is average middle-class families who are willing able to spend money on luxury goods. The company was founded in 2014 at Anderson of American University.

Part 2:

·      Fixed Costs

o   Rent: $2,000/month

o   Supplies: $1,000

o   Internet: $1,000

o   Heat/Cool: $5000

o   Total fixed costs: $9,000

·      Price: $300/unit 60 units made

·      Variable cost: 20

·      Cost Function: y = 9,000 + 20q

·      Revenue function: y = 300q

·      Profit function: y = 320q – 9,000

·      Break even point: (32.14, 9,642.86)

The break even point on the graph is when the company starts to make a profit, before this point, the company’s actually just recovering the money that they put in back.  Marginal cost is 20 and marginal revenue is 300.

Profit function:

The graph of the profit function shows what profit can be made at different quantities of goods sold

Part 3:

Q= 300 units

Marginal cost of producing nth unit = 20x

6,000 units

9,000 + 20 (300) = 15,000

The marginal revenue is greater than the marginal cost at q = n because 300 is greater than 20

The number of units sold is before the break even point. This means that the company hasn’t started to make a profit yet

If the production is increased by pne extra quantity per day the company will continue to make money. The revenue function plus 1 minus the revenue function and the cost function plus one minus the cost function yields a positive result.

At q=n an increase of production decreases the average cost for the company.

Decreasing average costs would be better for the company because they’d take in more profits.

Part four:

I believe that the company should do just fine in the next five years based on my research and analysis. My calculations show that the company will continue to make money.  Also tablets are becoming more popular and the economy has been on the mend these past couple of years. It is for those reasons that I believe that the company will do well.