Managerial Economics

A) Harding Silicon Enterprises, Inc. produces less than 1% of the world’s supply of 32 MB random access memory (RAM) chips for electronic devices. HSE’s RAM chips perform according to globally accepted performance standards for this type of silicon chip (i.e., its chips are just like every other producers’ chips). HSE has hired you to do undertake three tasks: 1. Perform a statistical analysis of its short-run production costs to estimate its total variable cost function, average variable cost function, and marginal cost function. HSE believes its total fixed costs will be $6,500 per month, so you do not need to estimate TFC. 2. Recommend production levels and forecast profits for two chip price scenarios: a. The price of 32 MB RAM chips reaches $62 per chip, and b. The price of 32 MB RAM chips falls to $35 per chip. 3. Determine the price below which HSE should shut down operations in the short run.