G.R. Dry Foods Distributors specializes in the wholesale distribution of dry goods, such as rice and dry beans. The firm’s manager is concerned about an article he read in this morning’s Wall Street Journal indicating that the incomes of individuals in the lowest income bracket are expected to increase by 10 percent over the next year. While the manager is pleased to see this group of individuals doing well, he is concerned about the impact this will have on G.R. Dry Foods. What do you think is likely to happen to the price of the products G.R. Dry Foods sells?

G.R. Dry Foods Distributors specializes in the wholesale distribution of dry goods, such as rice and dry beans. The firm’s manager is concerned about an article he read in this morning’s Wall Street Journal indicating that the incomes of individuals in the lowest income bracket are expected to increase by 10 percent over the next year. While the manager is pleased to see this group of individuals doing well, he is concerned about the impact this will have on G.R. Dry Foods. What do you think is likely to happen to the price of the products G.R. Dry Foods sells?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.5IP

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G.R. Dry Foods Distributors specializes in the wholesale distribution of dry goods, such as rice and dry beans. The firm’s manager is concerned about an article he read in this morning’s The Wall Street Journal indicating that the incomes of individuals in the lowest income bracket are expected to increase by 10 percent over the next year. While the manager is pleased to see this group of individuals doing well, he is concerned about the impact this will have on G.R. Dry Foods.What do you think is likely to happen to the price of the products G.R. Dry Foods sells? Why? The price will increase, because dry beans and rice are normal goods. The price will increase, because dry beans and rice are inferior goods. The price will decrease, because dry beans and rice are inferior goods. The price will decrease, because dry beans and rice are normal goods.
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You are the manager of a train company. Recently total sales have been a bit low and you are now considering means to give sales a boost. Market research has shown that currently the price of train tickets is historically low. Market research has also shown that the demand curve for train tickets is downward sloping. You may assume that your company is not a price taker on the market. i) One of your colleagues has suggested that it is important to lower the price of train tickets. In that case, she argues, the demand will increase. Do you agree with her? Explain why. ii) She continues her argument by concluding that if the demand goes up, the total value of sales of train tickets should therefore increase. Do you agree with her? Explain why.
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You are the manager of a train company. Recently total sales have been a bit low and you are now considering means to give sales a boost. Market research has shown that currently the price of train tickets is historically low. Market research has also shown that the demand curve for train tickets is downward sloping. You may assume that your company is not a price taker on the market. b)One of your colleagues has suggested that it is important to lower the price of train tickets. In that case, she argues, the demand will increase. Do you agree with her? Explain why. c) She continues her argument by concluding that if the demand goes up, the total value of sales of train tickets should therefore increase. Do you agree with her? Explain why. hi, can you answer part b and pact c for this question in detail please, thanks
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In Chapter 5 of Managerial Economics, Froeb discusses post-investment holdup as a sunk cost problem associated with contract-specific fixed investments. The modern theory of contracts is sometimes called the theory of joining wills, which simply means when parties make an agreement they are joining together to complete an endeavor of mutual interest. The problem with all contracts that endure over time is that not all potential challenges can be anticipated. The idea of joining wills is that parties will attempt to seek accommodations to advance their mutual interest, so long as the return on the invested activity pays off. Froeb illustrates the idea by the example of marriage as a contract. Review the three scenarios below. Look for which, if any, of these scenarios presents an example of post-investment holdup. Your firm conducted a search for a new chief financial officer and hired a highly qualified candidate with a yearly salary of $250,000. After six months, the person left to…
The Cobb-Douglas function is widely used in Economics to represent the relationship between the inputs and outputs of a firm. It takes the form Y = ALa KB, where Y represents the outputs, L the work and K the capital. This formulation can be applied to utility and takes the form u(x) = xal ...xan, where the exponents are positive and add up to 1. Consider the problem of maximizing utility: max xay1-a S.a p1x+p2y=w x, y≥0 Where p1, p2 > 0 are the prices and w > 0 the budget. A) Write the conditions of KKT and find a solution of them, depending on p1, p2,w and a. B) Can it be said that this solution is optimal for the original problem? Justify. C) Find the multiplier 1, depending on p1, p2, w and a.
Describe any three managerial decisions that can be applied by the manager from the estimated demand function
Symon Enterprises is an international construction company with global offices in twenty foreign markets around the world. Symon currently has over 15,000 employees around the world. The company has an excellent record as being an employer of choice. It recently was voted the number three company to work for in the world by Forbes Magazine. Symon Enterprises has become very adept at effectively handling its human resources even though there are vast differences in the various countries it services. The company attributes its HR success to the expertise of its HR directors. Symon’s practice has always been to hire human resource managers and directors from the country where they will be working. It has found this seems to give the company a competitive edge over the competition. Employee compensation, performance appraisals, and benefits vary greatly from culture to culture. Which one of the following would not be considered a challenge facing Symon Enterprises when it comes to…