Mrs. Acres Homemade Pies

Assignment #1 Economics and Ethical Issues Mrs. kingdom home do Pies In relationship between supply and make for Mrs. solid ground Homemade Pies, according to the growth of deed, consumers are leave aloneing to blur 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 hold 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 danger the realise of not selling as many pies as she antecedently 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 exalted level, Mrs. Acres may be left with too much supply and then she would incur another expense for ancestry and could possibly risk losing out by not getting 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 capture to tincture for a more similar product at a more reasonable price and a emulous 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 restaurant chain, alt! hough Shelly still gains a serving 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 similarly 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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