Regression Model Essay

4) For each article describe causes of changed price and the effects of the changed price.

In this assignment, pricing strategy for backpack will be discussed. After estimation of product’s cost, demand and mark up, we have to decide an appropriate pricing strategy for setting a base price for our backpack (Lamb etal. 2016). The alternative strategies for the backpack which would be discussed is price skimming and penetration strategy. Firms benefit from price skimming from high profit margin, perceived high quality and attract customers when price lowered, while it’s more applicable with inelastic demand, also attract competitors and having difficulty in adjusting appropriate time to lower the price. Penetration strategy brought positive effects such as low input cost, and it is suitable for elastic demand product. However, might result bankruptcy if company unable to survive in the beginning, it require long period for returns and low price might be tagged with low quality. The chosen strategy for backpack is price skimming which might results better effect on our targeted segment because outdoor enthusiasts aimed at high quality.

availability of substitutes, and justify how you determine the price elasticity of demand for your firm’s product. b) Explain the factors that affect consumer responsiveness to price changes for this product, using the concept of price

Such companies include Coca Cola Company and Pepsi. Such companies have the ability to offer their products at a lower price due to economies of scale in production. It is important for the product to cut down on overhead costs to ensure that they are able to offer the product at a lower price. Customers will be attracted to other products if the company is unable to meet their price expectations.

Thirdly, option is to strategically adjust the prices of their products because consumers are often very price sensitive. By doing so the company can either create more value that defines the quality and quantity of the product.

91. If your competitors’ prices are below your prices, then which of the following is most

* Use the profit maximization rule MR = MC to determine your optimal price and optimal output level now that you have market power. Compare these values with the values you generated in Assignment 1. Determine whether your price higher is or lower.)

Companies can choose many ways to set prices, skimming price strategy where a company sets a higher price than normal and a penetrating price where low initial price is set. “Pricing

In my opinion, menu prices and strategy are very important part of F&B and hospitality industry in general. All the prices are calculated in the way to maximize profit and offering guest a value for money to attract them. Menu pricing strategy is also very different when it comes to the type of a restaurant (Asian, fine

Since the maximum value of the predictor variable (calls) is used to formulate the given regression model is 201.00, which is less than 300, we cannot use the given regression model to accurately estimate the weekly sales for weekly call of 300. So we can’t say anything about the weekly sales when weekly calls are 300.

b. What is Beth’s profit maximizing price and quantity? Answer: MR = MC at a price of $0.60 and quantity of 5 cups. c. At that price, what are Beth’s economic profit and total consumer surplus? Answer: Profit = (P - MC) Q = (0.60 - 0.20) 5 = $2. Consumer surplus is reservation price minus actual price for each cup sold: ($1.00 - $0.60) + ($0.90 - $0.60) + ($0.80 - $0.60) + ($0.70 $0.60) = $1. d. What price should Beth charge if she wants to maximize total economic surplus? What quantity would she sell? How much would total economic surplus be? Answer: She should set P = MC = $0.20. Nine (or eight) cups of lemonade would be sold. Total economic surplus is reservation price minus marginal cost for each cup sold: ($1.00 - $0.20) + ($0.90 - $0.20) + ($0.80 - $0.20) + ($0.70 - $0.20) + ($0.60 - $0.20) + ($0.50 - $0.20) + ($0.40 $0.20) + ($0.30 - $0.20) = $3.60. e. Now suppose Beth can tell the reservation price of each person. What price would she charge

Pepsi’s has a large number of product lines and brands and thus the prices are considerably varied. Their main pricing strategy is based on the Market-Oriented pricing strategy to ensure that its prices are competitive as compared to the competitor’s prices and market conditions. Pepsi also used

The strategy for setting a product’s price often has to be changed when the product is part of a product mix. In this case, the firm looks for a set of prices that maximizes its profits on the total product mix. Pricing is difficult because the various products have related demand and costs and face different degrees of competition.

When Red Bull’s Cola was first introduced, it has been unsuccessful in gaining appeal and popularity amongst US consumers and retailers. This was in part due to a premium pricing strategy whereby it sells a 12 ounce can of Red Bull Cola for $1.50 as compared to its competitors like Coke and Pepsi Cola with similar size selling for $1.00. Additionally, the Red Bull Shots it was retailing 50 cents higher than most of its competitor which include the market leader “5-hour energy”. The premium pricing strategy has been originally use for Red Bull product since its inception whereby the price could range up to five times of other branded soft drinks. The same strategy was adopted with Red Bull Cola & Shots which was partly to blame when it failed to produce the same success. Porter five Forces analysis shows that in the Cola & Shots industry buyers have high bargaining power where there are low buyer switching cost and high substitutable products which can pressure sellers to sell at lower

Another potential issue with choosing this alternative of increasing prices would be the percentage by which the price rises are raised for the product. Having used the quantitative techniques on the ADR of Ritz Carlton found that a 9% increase in the ADR was considerably alike to present average of the ADR. This means that an increase