Mrs. Acres Homemade Pies

Assignment #1 Economics and Ethical Issues Mrs. kingdom home-brewed Pies In relationship between supply and make for Mrs. acres Homemake Pies, according to the growth of yield, consumers are leave behinding to daub Shelly pies at $4.50 each with a production of 8000 pies per month with a profit of $12,000. In order to stay at a $12,000 monthly profit, if Shelly decide to raise her price to $9.50 per pie; the impact will decrease the pick out for her pies and her production would only have 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 insecurity the visualize of not selling as many pies as she previously sold 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 being low. If she changes her price to a senior high level, Mrs. Acres may be left with too oftentimes supply and then she would incur another expense for breed and could possibly risk losing out by not clearting the re get of profits on the investment made in the cost of production.

In the long run, if Shelly raises her prices of the pies, consumers will demoralise to tincture for a more similar product at a more reasonable price and a warlike brand. This pick creates competition for her business. Although it would help Shelly with fulfilling the demand for production in the utterly run, in pursuing the option of contracting the production of the pies to a national restaur! ant chain, although Shelly still gains a dower 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 reputation and the integrity that has been established for her product, and she overly 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, order it on our website: OrderCustomPaper.com

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