The cost the upstream mill incurs for producing enough paper (one "unit" of paper) to make one unit of boxes is $12.50. Assume the two mills operate as separate profit centers, and the paper mill sets the price of paper. It follows that the marginal profitability of boxes represents the highest price that the box division would be willing to pay the paper division for boxes.. Furthermore, assume that fixed costs are $0 for the paper mill. The following table summarizes the quantity, total revenue, and marginal costs from the perspective of the paper mill for selling paper to the box mill at various prices. In the following table, fill in the marginal revenue, total cost, and total profit for the paper mill when selling paper to the box mill at each given price. Marginal Cost Price (Marginal Profitability to the Box Mill) ($) $40 $36 $32 $28 $24 $20 $16 $12 $8 $4 Quantity (Units of Paper equivalent to One Box) 1 2 3 4 5 6 7 8 9 10 Total Revenue Marginal revenue ($) In this case, the box mill will demand $40 $72 $96 $112 $120 $120 $112 $96 $72 $40 ($) $ $ $ $ If the paper mill sets the price of paper to sell to the box mill, it will set a price of for the paper mill. Companywide profits will be $ marginal profitability of each unit of paper, or box, to the box mill.) Total Cost ($) $12.50 $ $ $ $ Suppose the paper mill is forced to transfer paper to the box mill at marginal cost ($12.50). units of paper. This leads to companywide profits of S ($) $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 Profit ($) $ $ S S and sell units of paper to the box mill. Profits will be (Hint: Recall that the prices in the table represent the
The cost the upstream mill incurs for producing enough paper (one "unit" of paper) to make one unit of boxes is $12.50. Assume the two mills operate as separate profit centers, and the paper mill sets the price of paper. It follows that the marginal profitability of boxes represents the highest price that the box division would be willing to pay the paper division for boxes.. Furthermore, assume that fixed costs are $0 for the paper mill. The following table summarizes the quantity, total revenue, and marginal costs from the perspective of the paper mill for selling paper to the box mill at various prices. In the following table, fill in the marginal revenue, total cost, and total profit for the paper mill when selling paper to the box mill at each given price. Marginal Cost Price (Marginal Profitability to the Box Mill) ($) $40 $36 $32 $28 $24 $20 $16 $12 $8 $4 Quantity (Units of Paper equivalent to One Box) 1 2 3 4 5 6 7 8 9 10 Total Revenue Marginal revenue ($) In this case, the box mill will demand $40 $72 $96 $112 $120 $120 $112 $96 $72 $40 ($) $ $ $ $ If the paper mill sets the price of paper to sell to the box mill, it will set a price of for the paper mill. Companywide profits will be $ marginal profitability of each unit of paper, or box, to the box mill.) Total Cost ($) $12.50 $ $ $ $ Suppose the paper mill is forced to transfer paper to the box mill at marginal cost ($12.50). units of paper. This leads to companywide profits of S ($) $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 Profit ($) $ $ S S and sell units of paper to the box mill. Profits will be (Hint: Recall that the prices in the table represent the
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQP
Related questions
Question
![vate X
Student Portal | Main
CENGAGE MINDTAP
gage.com/static/nb/ui/evo/index.html?deploymentid=57962518850017814342930411958eISBN=9781337106603&id=1810088554&snapshotid=3502477&
Problems: Chapters 21 and 22
The cost the upstream mill incurs for producing enough paper (one "unit" of paper) to make one unit of boxes is $12.50.
X
Assume the two mills operate as separate profit centers, and the paper mill sets the price of paper. It follows that the marginal profitability of boxes
represents the highest price that the box division would be willing to pay the paper division for boxes.. Furthermore, assume that fixed costs are $0
for the paper mill.
Price
(Marginal
Profitability to
the Box Mill)
($)
The following table summarizes the quantity, total revenue, and marginal costs from the perspective of the paper mill for selling paper to the box mill
at various prices.
$40
$36
$32
$28
$24
$20
$16
$12
$8
$4
ECN-601 Class Resources
In the following table, fill in the marginal revenue, total cost, and total profit for the paper mill when selling paper to the box mill at each given price.
Marginal
Cost
Quantity
(Units of Paper
equivalent to
One Box)
1
2
3
4
5
6
7
"
8
9
10
Total
Revenue Marginal revenue
($)
$40
$72
$96
$112
$120
$120
$112
$96
x MindTap - Cengage Learning X +
$72
$40
($)
^^^^^^^^^
$
$
S
$
S
$
$
$
If the paper mill sets the price of paper to sell to the box mill, it will set a price of
for the paper mill. Companywide profits will be $
$
marginal profitability of each unit of paper, or box, to the box mill.)
Total Cost
― Q Search
($)
$12.50
$
$
Suppose the paper mill is forced to transfer paper to the box mill at marginal cost ($12.50).
$
$
$
In this case, the box mill will demand units of paper. This leads to companywide profits of $
($)
$12.50
$12.50
$12.50
$12.50
$12.50
$12.50
$12.50
$12.50
$12.50
Co
Profit
¡I
($)
$
$
and sell
units of paper to the box mill. Profits will be
. (Hint: Recall that the prices in the table represent the
S
S
$
$
$
S
$
S](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdfd56cfb-7bfc-4b10-8703-50c36abb0228%2Fb2c21f00-e29f-47b1-8c76-cff8523a6a0c%2Ffxwhgnz_processed.jpeg&w=3840&q=75)
Transcribed Image Text:vate X
Student Portal | Main
CENGAGE MINDTAP
gage.com/static/nb/ui/evo/index.html?deploymentid=57962518850017814342930411958eISBN=9781337106603&id=1810088554&snapshotid=3502477&
Problems: Chapters 21 and 22
The cost the upstream mill incurs for producing enough paper (one "unit" of paper) to make one unit of boxes is $12.50.
X
Assume the two mills operate as separate profit centers, and the paper mill sets the price of paper. It follows that the marginal profitability of boxes
represents the highest price that the box division would be willing to pay the paper division for boxes.. Furthermore, assume that fixed costs are $0
for the paper mill.
Price
(Marginal
Profitability to
the Box Mill)
($)
The following table summarizes the quantity, total revenue, and marginal costs from the perspective of the paper mill for selling paper to the box mill
at various prices.
$40
$36
$32
$28
$24
$20
$16
$12
$8
$4
ECN-601 Class Resources
In the following table, fill in the marginal revenue, total cost, and total profit for the paper mill when selling paper to the box mill at each given price.
Marginal
Cost
Quantity
(Units of Paper
equivalent to
One Box)
1
2
3
4
5
6
7
"
8
9
10
Total
Revenue Marginal revenue
($)
$40
$72
$96
$112
$120
$120
$112
$96
x MindTap - Cengage Learning X +
$72
$40
($)
^^^^^^^^^
$
$
S
$
S
$
$
$
If the paper mill sets the price of paper to sell to the box mill, it will set a price of
for the paper mill. Companywide profits will be $
$
marginal profitability of each unit of paper, or box, to the box mill.)
Total Cost
― Q Search
($)
$12.50
$
$
Suppose the paper mill is forced to transfer paper to the box mill at marginal cost ($12.50).
$
$
$
In this case, the box mill will demand units of paper. This leads to companywide profits of $
($)
$12.50
$12.50
$12.50
$12.50
$12.50
$12.50
$12.50
$12.50
$12.50
Co
Profit
¡I
($)
$
$
and sell
units of paper to the box mill. Profits will be
. (Hint: Recall that the prices in the table represent the
S
S
$
$
$
S
$
S
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 5 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Survey Of Economics](https://www.bartleby.com/isbn_cover_images/9781337111522/9781337111522_smallCoverImage.gif)
![Micro Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613064/9781337613064_smallCoverImage.gif)
![Managerial Economics: Applications, Strategies an…](https://www.bartleby.com/isbn_cover_images/9781305506381/9781305506381_smallCoverImage.gif)
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
![Survey Of Economics](https://www.bartleby.com/isbn_cover_images/9781337111522/9781337111522_smallCoverImage.gif)
![Micro Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613064/9781337613064_smallCoverImage.gif)
![Managerial Economics: Applications, Strategies an…](https://www.bartleby.com/isbn_cover_images/9781305506381/9781305506381_smallCoverImage.gif)
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning