The rise of digital music and the improvement to the DVD format are part of the reasons why the average selling price of standalone DVD recorders will drop in the coming years. The function below gives the projected average selling price (in dollars) of standalone DVD recorders in year t, where t = 0 corresponds to the beginning of 2002.† A(t) = 699 (t + 1)0.94 (0 ≤ t ≤ 5) What was the average selling price of standalone DVD recorders at the beginning of 2003? At the beginning of 2006? (Round your answers to the nearest dollar.) 2003$. 2006$

The rise of digital music and the improvement to the DVD format are part of the reasons why the average selling price of standalone DVD recorders will drop in the coming years. The function below gives the projected average selling price (in dollars) of standalone DVD recorders in year t, where t = 0 corresponds to the beginning of 2002.† A(t) = 699 (t + 1)0.94 (0 ≤ t ≤ 5) What was the average selling price of standalone DVD recorders at the beginning of 2003? At the beginning of 2006? (Round your answers to the nearest dollar.) 2003$. 2006$

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

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 8E: Bell Greenhouses has estimated its monthly demand for potting soil to be the following: N=400+4X...

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A firm keeps a record of sales and prices over the past seven months, resulting in the following table: Price (ZMW/ton) Sales (tons) Nov. 1985 7.5 84.5 Dec. 8.0 82.0 Jan. 1986 8.0 84.0 Feb. 7.2 92.0 March 7.0 95.0 April 8.0 92.0 May 8.5 91.5 Use these observations to estimate demand as a linear function of both price and time. Further, utilise this function to estimate demand for the following month, on the assumption that: (a) price remains unchanged, (b) price increases to ZMW9/ton. Hence estimate the price elasticity of demand between these prices and find the price which would maximise sales revenue. Given the nature of the observations, comment on any difficulties in interpreting your results for decision-making purposes.
Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web site construction is estimated to be $172,000. Variable processing costs are estimated to be $5 per book. The publisher plans to sell single-user access to the book for $42. Through a series of web-based experiments, Eastman has created a predictive model that estimates demand as a function of price. The predictive model is demand = 4,000 − 6p, where p is the price of the e-book. (a) Construct an appropriate spreadsheet model for calculating the profit/loss at a given single-user access price taking into account the above demand function. What is the profit estimated by your model for the given costs and single user access price (in dollars). $ (b) Use Goal Seek to calculate the price (in dollars) that results in breakeven. (Round your answer to the nearest cent.) $ (c) Use a data table that varies…
The demand function for a product is given by P = 4000/ln (x+10), where P is the price per unit in dollars when x units are demanded.i. Find the rate of change of price with respect to the number of units sold when 40 units are sold ii. Find the rate of change of price with respect to the number of units sold when 90 units are sold.iii. Find the second derivative to see whether the rate at which the price is changing at 40 units is increasing or decreasing.
A manufacturer of entertainment centers uses the completion of new homes as part of their demand forecast. They consider that for every five homes that cost over $300,000 in the city, they make one sale. For every 20 new homes that cost over $150,000 but less than $300,000 in the city, they make one sale. Their projected demand for the future period, before they consider home sales, is for six entertainment centers. They now receive home figures of ten new homes of over $300,000 and 40 new homes of $150,000-$300,000. What should their new forecast be?
The ATV Company produces a specialty cement used in the construction of roads. ATV is a price-setting firm and estimates the demand for its cement using a demand function in the linear form: Q = f (P, M, PR) where Qc = demand for cement/month (in yards) Pc = the price of cement per yard, M = country’s tax revenues per capita, and PR = the price of asphalt per yard. The manager of ATV obtained the following results in her attempt to estimate the demand for cement in the succeeding months. The results are presented below: DEPENDENT VARIABLE Qc R- SQUARE F-RATIO P-VALUE ON F OBSERVATIONS 64 0.8093 84.872 0.0001 VARIABLE PARAMETER ESTIMATE STANDARD ERROR T-RATIO P-VALUE INTERCEPT 8.20 4.01 2.04 0.0461 PC -3.54…
The ATV Company produces a specialty cement used in the construction of roads. ATV is a price-setting firm and estimates the demand for its cement using a demand function in the linear form: Q = f (P, M, PR) where Qc = demand for cement/month (in yards) Pc = the price of cement per yard, M = country’s tax revenues per capita, and PR = the price of asphalt per yard. The manager of ATV obtained the following results in her attempt to estimate the demand for cement in the succeeding months. The results are presented below: DEPENDENT VARIABLE Qc R- SQUARE F-RATIO P-VALUE ON F OBSERVATIONS 64 0.8093 84.872 0.0001 VARIABLE PARAMETER ESTIMATE STANDARD ERROR T-RATIO P-VALUE INTERCEPT 8.20 4.01 2.04 0.0461 PC -3.54…
The ATV Company produces a specialty cement used in the construction of roads. ATV is a price-setting firm and estimates the demand for its cement using a demand function in the linear form: Q = f( P, M, PR) where Qc = demand for cement/month (in yards) Pc = the price of cement per yard, M = country’s tax revenues per capita, and PR = the price of asphalt per yard. The manager of ATV obtained the following results in her attempt to estimate the demand for cement in the succeeding months. The results are presented below: DEPENDENT VARIABLE Qc R- SQUARE F-RATIO P-VALUE ON F OBSERVATIONS 64 0.8093 84.872 0.0001 VARIABLE PARAMETER ESTIMATE STANDARD ERROR T-RATIO P-VALUE INTERCEPT 8.20 4.01 2.04 0.0461 PC -3.54…
The ATV Company produces a specialty cement used in the construction of roads. ATV is a price-setting firm and estimates the demand for its cement using a demand function in the linear form: Q = f( P, M, PR) where Qc = demand for cement/month (in yards) Pc = the price of cement per yard, M = country’s tax revenues per capita, and PR = the price of asphalt per yard. The manager of ATV obtained the following results in her attempt to estimate the demand for cement in the succeeding months. The results are presented below: DEPENDENT VARIABLE Qc R- SQUARE F-RATIO P-VALUE ON F OBSERVATIONS 64 0.8093 84.872 0.0001 VARIABLE PARAMETER ESTIMATE STANDARD ERROR T-RATIO P-VALUE INTERCEPT 8.20 4.01 2.04 0.0461 PC -3.54…
Bell Greenhouses has estimated its monthly demand for potting soil to be the following: Assume this trend factor is expected to remain stable in the foreseeable future. The following table contains the monthly seasonal adjustment factors, which have been estimated using actual sales data from the past five years: MONTH ADJUSTMENT FACTOR (%) March +2 June +15 August +10 December −12 a. Forecast Bell Greenhouses’ demand for potting soil in March, June, August, and December 2007. Answer b. If the following table shows the forecasted and actual potting soil sales by Bell Greenhouses for April in five different years, determine the seasonal adjustment factor to be used in making an April 2008 forecast. YEAR FORECAST ACTUAL 2007 500 515 2006 452 438 2005 404 420 2004 356 380 2003 308 320
Manning Inc. is the leading manufacturer of garage doors. Demand for residential garage doors depends, of course, on the rate at which new houses are being built, which in turn depends on changes in income per capita. During the past year, Manning sold 10 000 garage doors at an average price of R1 500 per door. In the coming year, disposable income per capita is expected to increase from R32 000 to R34 000. Without any price change, Manning expects current-year sales to rise to 12 000 units. 1. Calculate the arc income elasticity of demand. 2. The company economist estimates that in conjunction with the change in income, if the price of doors is increased by R100, they could sell 11 500 doors. What is the arc price elasticity and what would be the company’s revenue? 3. Should they raise the price even more?
Every year in September, the NFL (National Football League) announces official prices of their next Super bowl tickets. The official ticket prices for 2022 Super bowl ticket in the NFL official websites started from $6,800 per person and it was up to over $81,800 per person depending on the location of the seats from the field. However, about three fourth of all tickets were already distributed to the NFL teams. The other one fourth are distributed to the media, NFL partners and sponsors. As a result, a small fraction of a total of about 70,000 tickets were sold in the secondary market. Those tickets were available to buy and sell in the official NFL online sites and other ticket brokers. Given the limited supply of tickets available to the NFL fans to purchase, the actual prices are dominated by the wide fluctuation of demand caused by many factors such as the venue of the game, the winning teams for the championship match, the packages of tickets offered by the brokers, and the…
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