Globalization’s fast pace around the world has helped people to adopt new trends and fashion at a higher rate as compared to the era with low level of FDI and trade. In Pakistan the growing concentration for Coffee cafes has opened new horizons for the investors to endow. If TYJ using the annual sales data of Gloria Jeans’ estimated the demand function for their upcoming venture in coffee market, answer the following:QC=10,000-20PCDerive the demand curve and explain the relationship between demand and price.If TYJ wishes to sell 5,000 cups of coffee a day, find the price for selling the same.Suppose if the price is determined at 350 identify the quantity TYJ would be able to sell.Suppose Espresso increases its price for per cup of coffee, illustrate and explain the impact it might create on the demand of coffee provided by TYJ.Calculating the risk, help TYJ identify at what price the demand for coffee would fall to zero. Also, explain in your opinion the demand of coffee is elastic or inelastic?

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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 6E

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Globalization’s fast pace around the world has helped people to adopt new trends and fashion at a higher rate as compared to the era with low level of FDI and trade. In Pakistan the growing concentration for Coffee cafes has opened new horizons for the investors to endow. If TYJ using the annual sales data of Gloria Jeans’ estimated the demand function for their upcoming venture in coffee market, answer the following:

Q_C=10,000-20P_C

Derive the demand curve and explain the relationship between demand and price.
If TYJ wishes to sell 5,000 cups of coffee a day, find the price for selling the same.
Suppose if the price is determined at 350 identify the quantity TYJ would be able to sell.
Suppose Espresso increases its price for per cup of coffee, illustrate and explain the impact it might create on the demand of coffee provided by TYJ.

Calculating the risk, help TYJ identify at what price the demand for coffee would fall to zero. Also, explain in your opinion the demand of coffee is elastic or inelastic?

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