Provide an example where changes in one or more of the non-price factors that influence demand have either helped a company to expand their market share or caused the company to lose their market place. You will need to fully explain your answer and the non-price factor/s related it.”

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No written by hand solution Suppose that headphones can be produced at a constant marginal cost. Headphone A is priced at $20 and headphone B is priced at $30.     (a) If the Lerner index of headphone A divided by the Lerner index of headphone B is 0.5, what is the marginal cost of producing headphones?   (b) Using your answer to part ‘a’, what is the elasticity of demand of headphone A? What is the elasticity of demand of headphone B?

1. Consider two companies involved in the supply chain: a retailer who faces customer demand and a manufacturer who produces and sells ski jackets to the retailer. It costs the manufacturer $30 to manufacture and ship each ski jacket. The retailer plans to sell the ski jacket for $300. At this price, demand for the ski jackets is estimated to be 10000 units with a 20 percent chance of happening, 9000 units with a 40 percent chance of happening, and 8000 units with a 40 percent chance of happening. Any ski jacket not sold during the ski season is sold to a discount store for $20. We refer to this value as the salvage value. Both the manufacturer and the retailer can sell the ski jackets they still have on hand after season for this salvage value. (a) Suppose the manufacturer sells to the retailer at $80/unit. How many ski jackets should the retailer order? How much profit does the retailer expect to make as a result? How much profit will the manufacturer make as a result? (b)What is the…

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