Mrs. Acres Homemade Pies

Assignment #1 economics and Ethical Issues Mrs. kingdom home-brewed Pies In relationship amidst supply and delineate for Mrs. kingdom Home do Pies, according to the increment of performance, consumers are pass oning to calumniate Shelly pies at $4.50 each with a work of 8000 pies per month with a profit of $12,000. In tall society to stay at a $12,000 monthly profit, if Shelly decide to face lift her price to $9.50 per pie; the impact will decrease the want for her pies and her toil would only hurt to be 2000 pies per month. The equilibrium price for Shelly pies is $6.00 per pie with a production of 4000 pies a month. In considering Mrs. Acres dilemma, if she continues to maintain production levels and raise her prices, she lay on the line the ascertain of non selling as many pies as she previously exchange causing her to have a surplus in supply. One reason the pies has sold so well was because of the demand for quality pies and the price existence low. If she changes her price to a high level, Mrs. Acres may be left with too frequently supply and then she would pick up another expense for blood line and could possibly risk losing bulge by not acquiring the re sire of clams on the investment made in the cost of production.

In the long dally, if Shelly raises her prices of the pies, consumers will produce to tincture for a more than similar product at a more bonnie price and a emulous brand. This pick creates competition for her business. Although it would answer Shelly with fulfilling the demand for production in the utterly run, in pursue the option of contracting the production of the pies to a national eating place chain, although Shelly still gains a section of profits, in the long run she risk the chances of loosing her ownership of her family recipe, which could in turn could hurt the nature and the integrity that has been established for her product, and she withal gives up her rights to solely make decisions on her product. Shelly would also risk loosing her guest base and not being able...If you want to get a full essay, rule it on our website: Orderessay

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