Question 1 "Applications of Cost Theory" Please respond to the following:
- Imagine you are a manager of a chemical company. An accident has occurred in which chemicals leaked into the ground water nearby, the community is unaware. Assess the costs involved in cleaning up the water immediately (confessing) versus hiding the fact and possibly paying more in the future. Discuss the impact on profitability in both situations. From the first e-Activity, assess the factors involved in conducting a break-even analysis. Determine the conditions that may exist for a manager of this good or service may decide to move forward with operations even with the initial costs of operations is more than the potential revenue.
Question 2 "Prices, Output and Strategy" Please respond to the following:
- Pick a good or service you are familiar. Speculate how the price for that good or service may have been set and how well this price maximizes profit for the company and determine what shifts the company should made in its pricing strategy. Provide support for your recommendations. From the second e-Activity, discuss how the company you selected should increase its competitive stance in the marketplace and how management would implement the recommendations. Provide specific examples to support your response.