A trader wants to open a diamond shop in the Singapore area with a choice of the Kembangan, Orchard or Sembawang area. Each of these area options has a local supplier providing a price quote for the diamond as detailed in the table below. Area Kembangan Orchard Sembawang Questions: a. What is the volume that must be met to get the economic value per area? Determine the volume range for each area. b. Make a crossover chart sketch that describes these conditions Fixed cost 5,500,000.00 11,500,000.00 21,500,000.00 Variable cost 55,000.00 35,500.00 15,500.00 c. If in the end the merchant wants to sell as many as 600 cans at a selling price of Rp. 60,000 per can, calculate the profit from each area. Where did the merchant finally determine his location?

A trader wants to open a diamond shop in the Singapore area with a choice of the Kembangan, Orchard or Sembawang area. Each of these area options has a local supplier providing a price quote for the diamond as detailed in the table below. Area Kembangan Orchard Sembawang Questions: a. What is the volume that must be met to get the economic value per area? Determine the volume range for each area. b. Make a crossover chart sketch that describes these conditions Fixed cost 5,500,000.00 11,500,000.00 21,500,000.00 Variable cost 55,000.00 35,500.00 15,500.00 c. If in the end the merchant wants to sell as many as 600 cans at a selling price of Rp. 60,000 per can, calculate the profit from each area. Where did the merchant finally determine his location?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 13CTQ: Think back to a purchase that you made recently. How would you describe your thinking before you...

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