Plot the appropriate short run and revenue curves ( you may need more than one diagram, and tables) to determine at which price and output levels "Draw Ltd", would achieve:
- maximum profit (or minimum loss)
- break even
- output maximum
- total revenue maximum
Available Output, Cost and Revenue Data
Econometric evidence on the level of company productivity suggests that the most efficient short run method to produce Q output of pencils is with full time workers L=0.0202 x Q.
The accountant has found that the cost of a worker in the short run is W=21972.133, the rent of the buildings is 245, whilst other capital costs are 128.
Statistical analysis by the sales/marketing team also finds that the inverse demand curve for the firm is given by: P= 1778.76- 24.705Q,
where Q is the quantity demanded and P is the price of pencils set by the firm. Note for the time period of that analysis all other market conditions were fairly constant.