Complete the following table to determine whether Tim is correct. Price Quantity Demanded Total Revenue Total Cost Profit (Dollars per can) (Cans) (Dollars) (Dollars) (Dollars) 2.75 1,500 3,750.00 3.00 1,000 3,500.00 Given the earlier information, Tim is not correct in his assertion that BYOB should charge $3.00 per can.

Complete the following table to determine whether Tim is correct. Price Quantity Demanded Total Revenue Total Cost Profit (Dollars per can) (Cans) (Dollars) (Dollars) (Dollars) 2.75 1,500 3,750.00 3.00 1,000 3,500.00 Given the earlier information, Tim is not correct in his assertion that BYOB should charge $3.00 per can.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4: Estimating Demand

Section: Chapter Questions

Problem 7E

See similar textbooks

Similar questions

After running a promotional campaign, the owners of a local hardware store decided to decrease the prices for the advertised products sold in their store. One can infer that a. the promotional expenditures made the demand for the advertised products more elastic. b. the promotional expenditures made the demand for the advertised products less elastic. c. the promotional expenditures had no effect on the demand elasticity. d. the owners got it wrong. To cover the promotional expenses, they should have raised the prices.
Please calculate the total cost of providing a 50% subsidy on purchases of fruit and vegetables at farmers markets by SNAP participants. Assume that you are estimating it for the state of Connecticut with 350,000 SNAP participants. The season for farmers markets and the use of subsidies is 5 months (May-September); subsidies can only be used during this period. Based on prior studies, you know that a typical SNAP participant that attends farmers markets will purchase on average 3 lb of fruit and 2 lb of vegetables per month. Average price for vegetables is $1.5 per lb and the price elasticity of demand for vegetables among SNAP participants is -0.6. Similarly, fruit cost on average $2.5 per lb and the demand elasticity for fruit is -0.8. How much should the state of Connecticut expect to pay in total subsidies each season if only 20% of SNAP participants will attend farmers markets?
Suppose the Kalamazoo Brewing Company (KBC) currently sells its microbrews in a seven-state area: Illinois, Indiana, Michigan, Minnesota, Mississippi, Ohio, and Wisconsin. The company’s marketing department has collected data from its distributors in each state. This data consists of the quantity and price (per case) of microbrews sold in each state, as well as the average income (in thousands of dollars) of consumers living in various regions of each state. The data for each state are available via the link below--please note there are multiple tabs at the bottom of the spreadsheet, each refers to one of the seven states selling the Kalamazoo Brewing Company’s microbrews.Excel Data FileAssuming that the underlying demand relation is a linear function of price and income, use your spreadsheet program to obtain least squares estimates of Wisconsin’s demand for KBC microbrews.Instruction: If the estimate is negative, enter a negative number (-) in the equation. Enter your responses…
Please no written by hand solutions Question 19 Which of the following figures is most likely to represent the cross-price elestioly of dernand of FiereOne internet services to Starlink intemet services. a) -3 b) 0 c) 2.5 d)⋅0.55
Please no written by hand and no image The Potomac Range Corporation manufactures a line of microwave ovens costing $600 each. Its sales have averaged about 8,000 units per month during the past year. In August, Potomac’s closest competitor, Spring City Stove Works, cut its price for a closely competitive model from $800 to $550. Potomac noticed that its sales volume declined to 5,500 units per month after Spring City announced its price cut. (A.) What is the arc cross elasticity of demand between Potomac’s oven and the competitive Spring City model? (B) Would you say that these two firms are very close competitors? What other factors could have influenced the observed relationship? (C) If Potomac knows that the arc price elasticity of demand for its ovens is –3.0, what price would Potomac have to charge to sell the same number of units it did before the Spring City price cut?
The price for cigarettes sold by Big Tobacco Co Ltd was6.00 per packet in March 2018. During the month of March, the consumption of cigarettes was 1000 packets. However, the Board of Directors of Big Tobacco Co Ltd decided to increase the price by 25% during the month of April. As a manager you noted that price elasticity of demand was 0.8. As a manager Big Tobacco Co Ltd: Advise your management ofthe strategy that could be adopted by your firm to maintain sales.
The price p (in dollars) and the quantity q sold of a certain product obey the demandequationq − 800 - 20P and 0 < p < 40 (answer iv and v) (i) Express the revenue R as a function of q.(ii) What is the revenue if 20 units are sold?(iii) What quantity q maximizes revenue? What is the maximum revenue?(iv) What price should the company charge to maximize revenue?(v) What price should the company charge to earn at least $3500 in revenue?
Q) The price for cigarettes sold by Big Tobacco Co Ltd was 6.00 per packet in March 2018. During the month of March, the consumption of cigarettes was 1000 packets. However, the Board of Directors of Big Tobacco Co Ltd decided to increase the price by 25% during the month of April. As a manager you noted that price elasticity of demand was 0.8. As a manager Big Tobacco Co Ltd: A. Advise your management of the strategy that could be adopted by your firm to maintain sales. B. Also, advise your government on recommended interventions in the cigarette market.
Suppose you own a tax preparation services company, with fixed costs of $3,000/month and marginal costs of $25/appt.If the price is $60/appt, 500 appointments would be sold. If the price is $50/appt, 760appointments would be sold. a.)Use these figures to calculate the price elasticity of demand for your services. b.)Calculate the monthly profits and profit margins (profit/revenue) associated with the price of $60/appt and $50/appt. c.)Given these calculations, what price should you charge for your services, $50/apptor $60/appt? Explain
Match each of the terms to their definition or description. Elastic Inelastic Total Revenue Test Unit Elastic A. there is not a significant response B. the response is on a one to one basis C. there is a significant response D. using elasticity to determine its effects on income
The MacDonald sells two popular packages of breakfast all day long: Mac A and Mac B. The sales of these products are not independent of each other (in economics, we call these substitutable products, because if the price of one increases, sales of the other will increase). The store wishes to establish a pricing policy to maximize revenue from these products. A study of price and sales data shows the following relationships between the quantity sold (Q) and prices (P ) of each model: QA = 20 - 0.62PA + 0.3PBQB = 29 + 0.1PA - 0.6PBi . Construct a model for the total revenue and implement it on a spreadsheet. b. Develop a two-way data table to estimate the optimal prices for each product in order to maximize the total revenue. c. Use "Solver" to find the optimal prices.
if the income elasticity of the product is less than 1. During an economic crisis a reasonable manager will likely a. Realize that it is an inferior good and will request BOT to convert the product to a normal good b. Request for an increase in production c. All of the choices are reasonable d. In an economic crisis, a good manager need to conduct analysis and evaluation. We cannot manage what we cannot measure. e. Request for a decrease in production