Discuss the importance of price elasticity of demand, income elasticity of demand and cross price elasticity of demand to a sales manager selling soft drinks like Coca Cola
Q: ohnny Rockabilly has just finished recording his latest CD. The company can produce the CD with no…
A: As per company policy we are supposed to answer only one question per session up to 3 sub points,…
Q: A two-product firm faces the following demand and cost functions: Qi = 40 – 2P, - P2 (0) Find the…
A:
Q: firm faces the following average revenue (demand) curve: P = 100 - 0.01Q where Q is weekly…
A: Given the information: Demand curve, P = 100 - 0.01Q Cost function, C = 50Q + 30000
Q: QUESTION SEVEN The average total cost of producing a commodity is given by ATC = 1000'g + 100 -…
A: As per the policy , we are allowed to solve the first three parts in case multiple sub parts.
Q: Assume that marginal revenue equals rising marginal cost at 100 units of output. At this output…
A: Firms operating in a market incur fixed costs and variable costs. Fixed costs will not change if…
Q: Blivets and p is measured in dollars. We Get Total revenue(measured in thousands of dollars)…
A: NOTE : Since there are multiple sub parts of the question, we shall solve the first three sub parts…
Q: Knitting Mills sells a line of women’s knit underwear. The firm now sells about 20,000 pairs a year…
A: We have, Q = 20,000 pairs a year, P = $10, FC = $60,000, VC = $120,000. 10 % increase in output…
Q: TRUE of FALSE Cost- plus pricing is circular for the manufacturing industry in that demand must be…
A: Cost-plus is a pricing method which uses to secure margin by fixing mark-up. The manufacturing firm…
Q: The Lumins Lamp Company, a producer of old-style oil lamps, estimated the following demand function…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Suppose that a firm’s fixed costs is $80, and variable costs per unit are $(2Q + 16). The demand…
A: The break-even point is where the total revenue is equal to total cost. This means what the firm…
Q: A business has found that it can sell 680 items if it sets its price to $66.9. However, if it lowers…
A: When the price is $66.9, then the quantity sold is 680 items. When the price is $40.19 then the…
Q: You manage a movie theater that can handle up to 8,000 patrons per week. The current demand, price,…
A: Demand and supply are the two major market forces. All the decisions are taken according to the…
Q: 20Q, where C is the total cost, F is a fixed cost, and Q is the level of output. The inverse demand…
A: Answer According to the question it is given that : Cost function (C) = F + 20 Q And, the inverse…
Q: Bavarian Crystal Works designs and produces crystal wine decanters for export to international…
A: Answer: Given, Demand function: P=1,000-0.0025Q Fixed cost = $1,000,000 Variable cost = $200 per…
Q: The total Revenue curve of a firm is R(q) = 40q -12q^2 and its average cost A(q) = 1/30q^2 – 12.85q…
A: Given Total Revenue (TR) = 40q - 12q2 Average Cost (AC) = (1/30)q2 - 12.85q + 20 + 400/q
Q: Your college newspaper, The Collegiate Investigator, sells for 90¢ per copy. The cost of producing x…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: A firm’s cost equation is given by TC = 200 + 10Q. The price elasticity of demand is -2. What is…
A: Given, Price elasticity of demand (Pe) = -2 TC = 200 + 10Q
Q: Question 1 A computer retailing company specializes in the sale of jump drives to community colle…
A: Given The demand function for jump drives is p=2x2+10x+1000 .........(1) The average…
Q: Bavarian Crystal Works designs and produces crystal wine decanters for export to international…
A: The equilibrium price and equilibrium quantity of a good sold in the market are determined by the…
Q: The figure shows graphs of the total cost function and the total revenue function for a commodity.…
A: The function that represents the total cost as being the sum of the variable costs and the fixed…
Q: Teddy J is a manufacturer of dish washing liquid. If his monthly demand function for 750ml size is…
A: Since you have posted a question with multiple subparts, we will solve the first three subparts for…
Q: A company manufacturing laundry sinks has fixed costs of $100 per day but has total costs of $2,500…
A: Profit maximizing level of output is at the point where marginal cost MC equals marginal revenue MR.…
Q: The total revenue curve of a firm is R(q) = 40q − 12q2 and its average cost A(q) = 1/30 q2 − 12.85q…
A: R(q) = 40q − 12q2 A(q) = 1/30 q2 − 12.85q + 20 + 400/q Total cost = A(q) * q
Q: functions are given as below Q_1=1200-10P_1 Q_2=800-10P_2 Where Q_1 is the domestic quantity: Q_2 is…
A: Demand function of the firm:- Q1=1200-10P1Q2=800-10P2Total cost function=0.05Q2+10000 Where; Q1 is…
Q: 6. What is the output that maximize revenue for uie firm given the following demand function Q = 15…
A: The cost function is simply the initial cost plus the manufacturing cost Here we calculate the…
Q: A company manufactures and sells x cellphones per week. The weekly price-demand and cost equations…
A: In part A, we are maximizing the total revenue of the firm and in part B we are maximizing the total…
Q: A fast food outlet finds that the demand equation for its new side dish, "Sweetdough Tidbit," is…
A:
Q: AMCO is a firm producing tables in Spain. It has a fixed cost of 100$ and a cost per unit of…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Royersford Knitting Mills, Ltd. sells a line of women’s knit underwear. The firm now sells about…
A: Given thatTotal sell-20,000 pair FC Fixed cost=$60,000Average price-$10 each VC…
Q: The total revenue curve of a firm is R(q) = 40q − 12q2 and its average cost A(q) = 1/30 q2 − 12.85q…
A: Given Total Revenue (TR) = 40q - 12q2 Average Cost (AC) = (1/30)q2 - 12.85q + 20 + 400/q
Q: If profit is maximum at sales of 700 units, does the firm have no choice but to limit sales at this…
A: Hi! thanks for the question but as per the guidelines, we can answer only one question at one time.…
Q: If total revenue rises by 20% when the price increases by 5%, this means:. Single choice. (1 Point)…
A: When an increase in price increases revenue, it means demand is inelastic.
Q: ie demand function for a company is p = 200 - 31 and the cost function is given by C(z) U+ 80z - z.…
A:
Q: Assume the following Demand Function: q+ 10p = 1250 Assume the following Average cost curve: 1000 AC…
A: Profit is maximized at a level where marginal revenue is equal to marginal cost.
Q: Your college newspaper, The Collegiate Investigator, sells for 90¢ per copy. The cost of producing x…
A: C (x) = 10 + 0.10x +0.001x2 Price = 90 cents Total Revenue (TR) = Price * Quantity TR = 0.90 x
Q: 15. Assume that an entrepreneur's short-run total cost function is C = q³ - 10q² + 17q + 66.…
A: Given The total cost function in the short-run: C=q3-10q2+17q+66 ... (1) Market price = 5…
Q: Assume that the marginal revenue equals rising marginal cost at 100 units of output. At this output…
A: The income gained by increasing product sales by one unit is referred to as marginal revenue in…
Q: Suppose the marginal cost and marginal revenue (in ¢000) for a product produced by a company is…
A: Given: MC=q+35 (in ¢000) MR=560+22q−q2 (in ¢000)
Q: Johnny Rockabilly has just finished recording his latest CD. The company can produce the CD with no…
A: P Q 30 10,000 28 15,000 26 20,000 24 25,000 22 30,000 20 35,000
Q: Natural-ExP is a unique company that is dedicated to making day trips to the Nevado de Toluca. The…
A: Here, the cost of new customer is given, which is also known as marginal cost, such that: Cmg=20g…
Q: 1. Teddy J is a manufacturer of dish washing liquid . If his monthly demand function for 750ml size…
A: i) To derive the expression for total revenue function: R(q)=P×QFor…
Q: Royersford Knitting Mills, Ltd., sells a line of women’s knit underwear. The firm now sells about…
A: Originally we have:Q=20,000P=$10FC=$60,000TVC=$120,000now as price reduced by 5% then new price will…
Q: Explain the role of costs in pricing decisions and describe how various combinations of price, fixed…
A: The major costs in pricing decisions can be listed as follows: Fixed cost: Fixed costs are the costs…
Q: Given Cost and Revenue functions C(q)=q^3-11q^2+55q+5000 and R(q)=−3q^2+2400q, what cost is incurred…
A: Hi there , as per our guidelines we are only allowed to solve up-to 3 sub parts of a question at a…
Q: Maximum Revenue Jesaki Electronics manufactures and sells a smartphones per week. The weekly…
A: Given Demand function smartphone: p=536-0.40x ............ (1) and cost function: C(x)…
Q: Completed as soon as possible thank u Suppose there is a firm with at least some market power that…
A: Price elasticity of demand refers to the percentage change in quantity demanded with respect to the…
- Discuss the importance of
price elasticity of demand , income elasticity of demand and cross price elasticity of demand to a sales manager selling soft drinks like Coca Cola - If a firm faces the Marginal Cost schedule MC = 180 + 0.3Q2 and the MR schedule is MR = 540 = 0.6Q2 and that Total Fixed costs are $65. What is the maximum profit it can make? Assume that the second-order condition for maximum is met
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
- The Potomac Range Corporation manufactures a line of microwave ovens costing $500 each. Its sales have averaged about 6,000 units per month during the past year. In August, Potomacs closest competitor, Spring City Stove Works, cut its price for a closely competitive model from $600 to $450. Potomac noticed that its sales volume declined to 4,500 units per month after Spring City announced its price cut. What is the arc cross elasticity of demand between Potomacs oven and the competitive Spring City model? Would you say that these two firms are very dose competitors? What other factors could have influenced the observed relationship? 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-demand equation for the production of bluetooth speakers is: p = 250 - 1/20x, for 0 is less than or equal to x and x is less than or equal to 5000 where x speakers can be sold at $p per each speaker. The cost to produce x speakers is given as C(x) = 150,000 + 30x, where both C(x) and p are represented in dollars ($). - find the profit function and the marginal profit and interpret the quantity P'(4500) - find the marginal cost and interpret the quantity C'(3000) - find the revenue function and the marginal revenue and interpret the quantity R'(3000)Wyandotte Chemical Company sells various chemicals to the automobile industry. Wyandotte currently sells 30,000 gallons of polyol per year at an average price of $15 per gallon. Fixed costs of manufacturing polyol are $90,000 per year and total variable costs equal $180,000. The operations research department has estimated that a 15 percent increase in output would not affect fixed costs but would reduce average variable costs by 60 cents per gallon. The marketing department has estimated the arc elasticity of demand for polyol to be –2.0.a. How much would Wyandotte have to reduce the price of polyol to achieve a 15 percent increase in the quantity sold?b. Evaluate the impact of such a price cut on (i) total revenue, (ii) total costs, and (iii) total profits.
- Wyandotte Chemical Company sells various chemicals to the automobile industry. Wyandotte currently sells 30,000 gallons of polyol per year at an average price of $30 per gallon. Fixed costs of manufacturing polyol are $180,000 per year and total variable costs equal $360,000. The operations research department has estimated that a 15 percent increase in output would not affect fixed costs but would reduce average variable costs by 60 cents per gallon. The marketing department has estimated the arc elasticity of demand for polyol to be –2.0. How much would Wyandotte have to reduce the price of polyol to achieve a 15 percent increase in the quanity sold in percent? Such a price cut would increase or decrease total revenues from $900,000 to $ ? Total costs would be $ . and total profits would be $ ?has established that the relationship between the price for one of its products is approximately. In addition there is a fixed cost of $45,000 per year and the variable cost to manufacture the product is $45 per unit. What level of demand maximizes the total revenue? Ans. is Blank 1. What level of demand maximizes the total profit for this product? Ans. is Blank 2. Blank 1_____________ Blank 2_____________Bavarian Crystal Works designs and produces crystal wine decanters for export to international markets. The marketing manager of Bavarian Crystal Works estimates the demand curve for each month to be: P=1,000-0.0025Q where Q is the number of wine decanters produced annually. Bavarian Crystal Works also pays a lease for its factory and equipment every month in the amount of $1,000,000. Finally, the cost to produce each wine decanter is $200. What is the marginal revenue at 40,000 units? If Bavarian Crystals is currently producing 40,000 units would you recommend they increase their production?
- Royersford Knitting Mills, Ltd. sells a line of women’s knit underwear. The firm now sells about 20,000 pairs a year at an average price of $10 each. Fixed costs $60,000, and total variable costs equal $120,000. The production department has estimated that a 10 percent increase in output would not affect fixed costs but would reduce average variable cost by 40 cents. The marketing department advocates a price reduction of 5 percent to increase sales, total revenues, and profits. The arc elasticity of demand is estimated at -2. Evaluate the impact of the proposal to cut prices on (1) total revenue, (2) total cost, and (3) total profits. If average variable costs are assumed to remain constant over a 10 percent increase in output, evaluate the effects of the proposed price cut on total profits.(i) If the demand function for a particular commodity is p=−0.09x+51 and the total cost function C(x)=1.32x2+11.7x+101.4,where x is the level of production. Find (a) The revenue R(x) and profit Π(x). (b) All values of x for which production of the commodity is profitable. (ii) The total cost of manufacturing x units during the daily production run at a factory,is C(x)= x2+ x+900 dollars. Usually,x(t)=25t units are manufactured during the first t hours of production. (a) Express the total manufacturing cost as a function of t. (b) How much will have been spent on production by the end of the third hour? (c) When will the total manufacturing cost reach $11,000?Bavarian Crystal Works designs and produces crystal wine decanters for export to international markets. The marketing manager of Bavarian Crystal Works estimates the demand curve for each month to be: P=1,000-0.0025Q Where Q is the number of wine decanters produced monthly. Bavarian Crystal Works also pays a lease for its factory and equipment every month in the amount of $1,000,000. Finally, the cost to produce each wine decanter is $200. What quantity would maximize profits? What is the optimal price for Bavarian Crystals to charge?
- A firm has a linear demand function for it's product.When the price for the product is Sh.220,the quantity demanded is 40 units.When the price increases to Sh.240 the quantity demanded becomes 30 units.In addition,the firm's marginal cost function is given by; MC = 40Q-2Q^2+2 Fixed cost = Sh. 5 million Where Q= quantity demanded, Mc= marginal cost(cost in Sh. Million) Required 1.The level of output that maximises profits 2.The maximum profit 3.The price of the product at a maximum profitA company manufacturing laundry sinks has fixed costs of $100 per day but has total costs of $2,500 per day when producing 15 sinks. The company has a daily demand function of q = 360 − p, where q is the number if laundry sinks demanded and p is te price of a laundry sink. (e) What is the maximum profit?Knitting Mills sells a line of women’s knit underwear. The firm now sells about 20,000 pairs a year at an average price of $10 each. Fixed costs $60,000, and total variable costs equal $120,000. The production department has estimated that a 10 percent increase in output would not affect fixed costs but would reduce average variable cost by 40 cents. The marketing department advocates a price reduction of 5 percent to increase sales, total revenues, and profits. The arc elasticity of demand is estimated at -2. i. Evaluate the impact of the proposal to cut prices on (1) total revenue, (2) total cost, and (3) total profits. ii. If average variable costs are assumed to remain constant over a 10 percent increase in output, evaluate the effects of the proposed price cut on total profits.