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- A. “There is constantly a shift in supply and demand curves and markets are never at equilibrium. As a result, there is no purpose of the concept of equilibrium.” Do you agree/disagree with this statement. B. Resorts give discounts to individuals who book in advance and stay over a weekend. Individuals who book at the last minute and do not stay over a weekend usually pay full price. Explain the difference between the two groups’ demand for resorts and the resorts’ pricing decisions?Using the table find the following. 1. Elixir’s profit maximizing output ___bottles 2. Profit maximizing price $___ per bottle 3. Economic profit $___ 4. Starting at the equilibrium price, compute the elasticity of demand when there is an increase in price by +$1.1) What is the profit-maximizing price?2) What is the profit-maximizing quantity?3) What is total revenue at the profit-maximizing quantity?
- a. Draw the marginal revenue curve. Plot only the endpoints of the graph below. 210 180 Costs and revenues @ ° ° ū 150 120 0 10 20 30 40 50 60 70 80 90100 1020130140 Quantity per period D MC Tools marginal rever1. Annual purchases of laptop computers in a certain market are 10 000 at a price of $3000, 20 000 at a price of $2000, and 30 000 at a price of $1000. a. Draw a graph showing this demand curve. Plot three points to draw the curve. b. Find sellers' total revenue at each price. c. On the basis of your answer to part b, is the market demand curve for laptop computers elastic or inelastic in the price range $3000 to $2000? in the price range $2000 to $1000? d. Calculate the numerical values of price elasticity of demand, e, in the two relevant price ranges using the formula found in the chapter. e. Are your answers to parts c and d for the two relevant price ranges consistent? 2. Calculate the appropriate elasticity coefficient in each of the following cases using the relevant formula outlined in the chapter. a. A drop in the price of hybrid cars from $25 000 to $20 000 causes purchases of gasoline-powered cars to fall from 1 million to 750 000 per year. b. Monthly purchases of…Assume that you own a local brewery and that you sell 12 packs of your beer for $10 each. You hire a consultant to help you improve your business and she shows you that the price elasticity for your beer is 0.85. If your goal is to maximize your income/revenue, what should you do? 2. You run a hotel and you have determined that if you lower the price of your rooms 15% you will be able to rent 20% more rooms each month a.What is your price elasticity of demand for hotel rooms? b. If you want to maximize your revenue from renting out hotel rooms, what, if any changes should you make to the price? 3. Which product likely has a more in elastic demand, a movie ticket or lifesaving medication? Why? 4. If new substitutes are developed for a product, what will likely happen to the demand curve for that product? 5. If new substitutes are developed for a product, what will likely happen to the total revenue maximizing price for that product?
- 25) What is the profit-maximizing price? 26) What is the profit-maximizing quantity? 27) What is total revenue at the profit-maximizing quantity?This is the Problem exactly as my Instructor has posed it - please note that there is no price or QTY given, we are supposed to use hypothetical numbers and answer the questions from the "article" with just the information given. Senate and House Committees Set Sights on Big PharmaNew York Times, January 29, 2017Buckle up Big Pharma, it's going to be a bumpy ride in Congress this year. Senate and House Committee Chairs will gavel in the first of a series of hearings on soaring drug prices. “ Both chambers are expected to re-introduce bi-partisan legislation to stymie so-called pay-for-delay tactics drug-makers use to slow the introduction of generics. The proposed legislation is also expected to allow the importation of prescription drugs from approved Canadian pharmacies. (A) Below construct a market for name-brand prescription drugs as of 2017 labeling supply and demand with the subscript “17” and note the equilibrium price and quantity. Assume that the demand for prescription…BAD Enterprises is considering increasing the price of its harmonicas, currently $20, by 25 per cent. BAD’s current revenue is $12,000 a month, and the PED for its harmonicas is estimated to be -1.8. a. Calculate the effect of the price change on BAD’s revenue. b. BAD now considers increasing its advertising budget to restore its sales revenue to its previous level. BAD is currently spending $1,500 a month on advertising and estimates its AED to be 1.5. What will its new budget have to be? c. What can you say about what will happen to profit in both (a) and (b) compared with the original level of profit?
- Snooki, a new marketing intern, was a little scatterbrained during the first meeting with her manager, when she made four statements about pricing. Which one of her four statements about pricing was correct? a. A product with an elastic demand is likely to face little competition. b. An EDLP retailer offers many price promotions. c. A product with an elasticity of demand of -0.7 will enjoy increases in revenue when prices are cut. d. Cost-plus pricing is not the perfect pricing strategy because the pricing method ignores customers’ willingness to pay and competitors’ pricing strategy.Ali's Gyros operates near a college campus. Ali has been selling 120 gyros a day at $4.50 each and is considering a price cut. He estimates that he would be able to sell 200 gyros per day at $3.50 each.a. Calculate the price elasticity of demand using the midpoint formula. b. Calculate the change in revenue as a result of the price cut.c. Explain why demand for Carmel cigarette tend to be more inelastic in the short run than in the long run. d. XYZ company specializes in supplying online sofa bed and wish to increase its total revenue. Based on the online data, XYZ company knows that its customers can be divided into two distinct markets: West coast Malaysia (WCM) and East coast Malaysia (ECM). The following table shows how the two regions respond to a 30% rebate: Volume of sales before West coast Malaysia East coast Malaysia the 30% rebate (sales per month) (sales per month) 500 300 Volume of sales after the 30% rebate 2000 400 į Using the midpoint method, calculate the price elasticities of demand for both regions. ii. If XYZ company wants to boost its sales and income, should the rebate be offered to West coast Malaysia or East coast Malaysia, or both regions, or neither regions? Justify your answer.