The "Me So Gucci" energy drink is a special drink that will help you feel good and give you the "boost" you need to finish anything! The Me So Gucci will help you finish that long assignment given on a friday night and you procrastinated all weekend and you are here on a sunday night cramming to finish it. It will also help you perform better for sports and give the boost during the second half of your workout. The Me So Gucci is also extremely healthy for you with no crash so you do not have to worry about how you will feel the next day. It is the perfect drink to help you get through the tough times and make your day more efficient!
PART 2
The BEP is where the profit will be positive.
50 is the point where it determines if the drinks have made profit or not. If we sell more than 50 then we have made profit.
Marginal Revenue would be 2$ because it is Price Per Unit - Variable Cost.
4-2 = 2$ profit for every drink we sell.
The Marginal Revenue and Marginal Cost are the same (2=2) so therefore the drinks will be constant at it's pace of profit.
The number of drinks sold a day is before the breaking point so they need to sell more drinks to make a profit.
Increasing a unit by one:
2(101) + 1 - 2(100)
202 - 200 = 2$
Yes the drinks would still make more profit by 2$
Since MC <AC then an increase in drinks would decrease my profit.
Decreasing the AC would gain more revenue because the MC is lower. It would require less money to pay for the drinks. Therefore you can produce more.
PART 4
I believe my company will do well in 5 years. If the company expands more and sells more products than we can can make a company out of it. Since it is a sole proprietorship, I am the only one in the business but I can expand if people were to like my drinks. As health has becoming a huge concern these days more people will need to find ways to get the energy they need and not ruin their health by drinking other types of energy drinks. My drink is also very low and efficient so more consumers will come in the next 5 years.
I really liked the idea of a healthy energy drink. I liked idea of constant production.
ReplyDeleteClear, concise, and understandable. Great idea
ReplyDeleteHi Royce; this is an interesting post. you used clear terms and idea. However, It will be more professional if you used word or PowerPoint to create your graphs.
ReplyDeleteroyce,
ReplyDeletethe idea for a health energy drink is really great! i like your introduction about the business idea a lot. generally, the calculations, graphs, and explanations in your post are good.
there are a few issues with some of the math and explanations though that i will address. for starters, your break even point is 50 units, so i am not sure why in your first image you have that the bep as 200 units. the graph of the slopes of marginal cost and the average cost has too many lines. there should only be the average cost slope with a slope of 400 and marginal cost with a slope of 2. the average cost slope should be very steep and the marginal cost slope should be less steep. finally, i think your marginal revenue is $4 per unit so mr and mc would not have the same slopes.
i really like your closing statement and how you stand by the fact that a health conscious drink will gain more popularity as the years go by.
professor little