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Shareholders: Pham T.T Duong Tran Thi Hanh
Nguyen T. Hong Linh
Pham T. Cam TuInstructor: Ms. Quyen
Yogurt 365
Table of contentOverview about business
Factors affecting demand & supply
Equilibrium & ElasticityTaxationFactors of productionDifferent costs of businessDecision making
Overview about business
Capital: 200 millions VND Main activities: serving yogurt & related
products Location: 165 Luong The Vinh , Tu Liem Area: 30m2 inside – 10m2 outside Opening-closing time: 7am - 9.30pm
(weekdays) 7am - 10.30pm (weekends)
Overview about business
Employees:1 business manager 2 shop servers 1 bartenderTarget customers: students &
householdsMain product: yogurt
Factors affecting Demand & supply
Demand:
Price of related goods Income, expectation No. of buyers
Factors affecting Demand &
supplySupply:
Inputs Competitors Technology Expectation
Quantity supplied & demanded
P(VND) Qs Qd Es Ed
11000 20 120 - -
12000 30 110 - -0.9
13000 40 100 4.0 -1.1
14000 50 90 3.25 -1.3
15000 60 80 2.8 -1.6
16000 70 70 2.5 -1.9
17000 80 60 2.3 -2.3
18000 90 50 2.13 -2.8
19000 100 40 2.00 -3.6
Equilibrium conditions
Conclusion At P = 16,000 VNDQuantity demanded =
Quantity supplied = 70Equilibrium point =
(70;16,000)Total revenue = 1,120,000
VND
Elasticity of products
P(VND) Qs Qd Es Ed
11000 20 120 - -
12000 30 110 - -0.9
13000 40 100 4.0 -1.1
14000 50 90 3.25 -1.3
15000 60 80 2.8 -1.6
16000 70 70 2.5 -1.9
17000 80 60 2.3 -2.3
18000 90 50 2.13 -2.8
19000 100 40 2.00 -3.6
Pricing strategies TR = P*Q E = % ∆Q * % ∆ P
P↑ → TR↑ → increase price of goods P↓ → TR↓ → not decrease price of goods
P↑ → TR↓ → not increase price of goods P↓ → TR↑ → decrease price of goods
Taxation
the income tax = 0
tax for business registration = 0
Excise tax = 1millions per year
Factors of products
Land: Rent 30m2 Rent expense = 4.5 millions
VND/month Labor: 4 employees (no salary expense) Capital: 200 millions VND (shareholders)
Different costs Implicit costs (Opportunities costs) Economic depreciation Normal profit
Explicit costs : Fixed cost Variable costs
Different costs Fixed costs: are the costs that do not vary
with the amount of output productions including:
Rent cost =4.5millons VND/month
Salary expense =0 Utility expense =1.5millions
VND/month
Different costs Variable cost: are the costs that
do vary with the amount of output productions
With 70 cups: total variable costs = 5,000 VND * 70 = 350,000 VND
Cost tableQuantity
(Q) FC VCTC
(FC+VC)AFC(FC/Q)
AVC(VC/Q)
ATC(TC/Q)
MC(∆TC/∆Q)
0 550,000 0 550,000
10 550,000 20,000 570,000 55000 2000 57000 2000
20 550,000 35,000 585,000 27500 1750 29250 1500
30 550,000 46,000 596,000 18333 1533 19867 1100
40 550,000 70,000 620,000 13750 1750 15500 2400
50 550,000 103,570 653,570 11000 2071 13071 3357
60 550,000 178,570 728,570 9167 2976 12143 7500
70 550,000 300,000 850,000 7857 4286 12143 12143
80 550,000 510,000 1,060,000 6875 6375 13250 21000
90 550,000 850,000 1,400,000 6111 9444 15556 34000
100 550,0001,250,00
0 1,800,000 5500 12500 18000 40000
Typical cost curve
Decision making
ATC min = 12,143 VNDAVC min = 1,533 VNDP= 16,000 VND
Decision making
Short-run
1. If P>ATC min → profit → continue business
2. If AVC min< P < ATC min → loss but smaller than AFC → continue business
3. If P<AVC min → loss and greater than AFC → shut down
Long-run
1. If P>ATC min → profit → continue business
2. If P<ATC min → loss → exit business
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