Victor plans to set up an online business selling software applications that he develops and supports. He believes that a price of $130 for his product including the technical support would be competitive. His monthly fixed expenses amount to $850. Victor would hire some college students to provide the technical support of the application paying them for 3 hours at $15 per hour for each client. a) How many clients does Victor need to acquire to break even? b) If he wants to achieve a target profit of $500 monthly, how many clients does he need?
Q: Perrier and Apollinaris. Perrier and Apollinaris are two companies that sell mineral water in Tampa,…
A: As per given information:- Apollinaris Perrier High Price ($2) Low Price($2) High Price…
Q: You are the manager of College Computers, a manufacturer of customized computers that meet the…
A: Monopoly refers to the market where the price is charged higher than the marginal cost such that the…
Q: Softco is a software company that sells a patented computer program to businesses. Each business it…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: You operate a Caribbean destination resort. You currently offer plans for a cruise departing from…
A: Mixed bundling is a strategy in which a customer is allowed to purchase the goods either together as…
Q: Your firm's research department has estimated your total revenues to be R(Q) = 3,000Q - 8Q² and your…
A: In economics, the distinction among the overall advantage from an activity and the total value of…
Q: As a manager of a chain of movie theaters that are monopolies in their respective markets, you have…
A: Price discrimination refers to the practice of charging different prices to different consumers for…
Q: Suppose a drug company has a patent on a cancer drug that allows it to enjoy monopolistic rents for…
A: Answer: Demand function: p=120-0.3Q Cost function: CQ=100+0.3Q+0.2Q2 When the market switches from…
Q: The average consumer at a firm with market power has an inverse demand function of P 10 - 2G The…
A: Given:P=10-2QC=5QNow,MC=∂C∂QMC=5
Q: Smyth Industries operated as a monopolist for the past several years, earning annual profits…
A: Given: Profit earned annually=$ 10 million Interest rate=5% To find: Present value of Smyth…
Q: Refer to Figure 5-1 When price falls from P3 to P1, the firm finds that it.... decreases its fixed…
A: A perfect competition earns normal or zero profit in the long run. This means price equals Marginal…
Q: Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse…
A: Given, Joe's inverse demand curve, p = 120 - 2q. Marginal cost = $20 Thus, at marginal cost $20,…
Q: You are the manager of a bakery that produces and packages bran buns. According to the new research,…
A: Inverse demand function, P = 4 – 0.5Q Cost function, C(Q) = 1Q
Q: Your company is going to produce two versions of its new video game systems, Boxy-x,B1, and…
A: Bertrand's duopoly is the one in which firms simultaneously decide prices for the goods.
Q: Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse…
A: The practice of charging different prices for the same good or service from different customers is…
Q: has 10 rooms with a marginal cost of $20. During the high season, the demand equation is QH=700 –…
A: Given:The demand equation during high-season:QH=700-2PHQH=10
Q: So to maximize profit, you want to make sure that your customers buy as many concessions as…
A: Given information Total customers=3220 Group P: Buys only popcorn: 750 customer Croup C: Buys only…
Q: Perrier and Apollinaris. Perrier and Apollinaris are two companies that sell mineral water in Tampa,…
A: Given: Fixed cost for each company = $5000/period Available set of prices = $2(high) and $1(low) At…
Q: Assuming you are the managing director of a firm that produces three goods: A, B and C. The price…
A: Price elasticity of demand is the proportion change in quantity demanded to changes in price.
Q: For a price searcher utilizing a simple (uniform) pricing scheme, which statement best expresses the…
A: Marginal cost is the additional cost incurred in order to produce an additional unit of output.
Q: Economics you are the manager of College Computers, a manufacturer of customized computers that…
A: Equilibrium level of quantity refers to the quantity where the supply of the goods is met by the…
Q: You are the manager of College Computers, a manufacturer of customized computers that meet the…
A: The firm College Computers follow the monopolistic competitive firm’s profit maximization condition…
Q: A firm has $200 million in total revenue and explicit costs of $190 million. Suppose its owners have…
A: Opportunity cost =10% of $100=$10 Economic profit =total revenue - total cost(explicit + implicit)…
Q: Website Profit The latest demand equation for your gaming website, www.mudbeast.net, is given by q =…
A: Answer: Given, Demand equation: q=-200x+1000Where,q=munber of user who log on per monthx=log-on fee…
Q: Fill in the blanks: The owner of a firm expects to make a profit of Php200,000.00 for each of the…
A: The measure that depicts the current stream of income being discounted at a specified rate of return…
Q: You are the manager of a firm that produces products X and Y at zero cost. You know that different…
A: Since, you have posted a question with the multiple sub-parts, we'll solve first two sub-parts for…
Q: You operate a Caribbean destination resort. You currently offer plans for a cruise departing from…
A: Bundling is when two or more goods are offered as a package.
Q: Pretend your company won a license to build a U.S. cellular system (the application cost for the…
A:
Q: he second-largest public utility in the nation is the sole provider of electricity in 32 counties of…
A: The inverse demand function is given P = 1200 - 4Q The marginal revenue function faced by the…
Q: As a manager of a chain of movie theaters that are monopolies in their respective markets, you have…
A: Pricing Strategy is an apparatus used to fix the cost of a specific item or administration by…
Q: You are the manager of a firm that produces products X and Y at zero cost. You know that different…
A: Hi, thank for the question. Since, you have posted a question with the multiple sub-parts, we'll…
Q: A new tropical fruit juice product was entering the marketplace. The director of marketing for the…
A: 1. Yes, there is a significance in between media and marketing strategy, due to the p value below…
Q: Next Friday, you plan to sell cakes at a bake sale to raise money for your school. You plan to…
A: Cost: It refers to the price of goods and services. The cost of the goods and services changes with…
Q: As a manager of a chain of movie theaters that are monopolies in their respective markets, you have…
A: On weekend demand function is given by, P = 20 – 0.001q Cost will be given by the following equation…
Q: Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse…
A: A two-part tariff is a kind of price discrimination used by monopolists to maximize their profit. In…
Q: Rod N. Reel owns a dealership that sells fishing boats in an open price-searcher market. To develop…
A: Introduction Data of weekly sold boats and revenue of boats of Rod has given. Table: Price ($)…
Q: Managers at AAA corporation are targeting two markets: consumers in group A and consumers in group…
A: we have Marginal cost =MC=$5 price elasticity of A (at MR=MC) =-1.8 Thus MR=MC=P1+1Epor…
Q: You are the manager of a firm that produces furniture. All your clients are in Kumasi (K) and Accra…
A: It is a profit maximization problem with 2 plants at different locations. Profit will be maximized…
Q: When a firm produces one more unit of output the total revenue increases from $805 to $965, and the…
A: The profit of a firm is given by the total revenue received from selling the products that are…
Q: Your firm is considering entering a new territory. From market research, you have obtained the…
A: Given Q = 20 - 6P + 2A A=10,000 =10 (in thousands) MC=1 Q=20-6P+2(10) Q=20-6P+20 Q=40-6P 6P=40-Q…
Q: You operate a Caribbean destination resort. You currently offer plans for a cruise departing from…
A: Bundling increases efficiencies as more goods are involved, thus reducing marketing and distribution…
Q: As a manager of a chain of movie theaters that are monopolies in their respective markets, you have…
A: In the production process, the conditions and fluctuations that happen between demand and also the…
Q: You have just been hired as manager of a new health spa in Retirement Village, Florida. The owner…
A: The owner has commissioned a market study that estimates the average customer’s monthly demand curve…
Q: Joe has moved to a small town with only one golf course. His demand curve is P = 120 – 2Q where Q is…
A: Two-part pricing is another example of price discrimination which contains a membership fee and a…
Q: A firm faces two groups of consumers with different demand equations as follows: Strong demander: Ps…
A: We are going to use two tariff pricing strategy to answer this question
Q: Jones is the manager of an upscale clothing store in a shopping mall that contains only two such…
A: A market is the place where the exchange of goods and services are facilitated. This means that the…
Q: Suppose you are a producer that sells products to two groups of buyers. These groups of buyers have…
A: Enterprises use the price elasticity of demand to modify their demand elasticity. If the demand for…
Q: Wyandotte Chemical Company sells various chemicals to the automobile industry. Wyandotte currently…
A: a) Achieve a 15 percent increase in the quantity sold Following is the formula of elasticity of…
Q: You are the manager of College Computers, a manufacturer of customized computers that meet the…
A: The monopolistic competition is the competition or a form of market where the firms compete against…
Q: Pizza Shanghai, a boutique pizza chain that positions itself as purveyor of 'adventurous' pizzas…
A: As the question asked to solve only (b), only (b) is solved. Utility gives the levels of…
Victor plans to set up an online business selling software applications that he develops and supports. He believes that a price of $130 for his product including the technical support would be competitive. His monthly fixed expenses amount to $850. Victor would hire some college students to provide the technical support of the application paying them for 3 hours at $15 per hour for each client.
a) How many clients does Victor need to acquire to break even?
b) If he wants to achieve a target profit of $500 monthly, how many clients does he need?
Step by step
Solved in 2 steps with 1 images
- Part A- You are a manager of an advertising company. The company is running short of funds, so you decide to increase revenue. Should you increase or decrease the price of running ads? Explain. PART B - You own a printing firm. Two of your senior managers provide you with advice. The first manager states that your company is losing money for every unit that is printed. To minimize losses, she advises that you reduce your production levels. The second manager states that if your firm sells some more units, the price will cover your increase in costs. In order to reduce losses, the second manager recommends that you should increase production. Explain which manager is correct and who is offering the correct advice?You operate a Caribbean destination resort. You currently offer plans for a cruise departing from the resort and plans for a casino stay. It is expected that in 2021 there will be some return to more normal travel. You will re-launch your advertising for 2021 announcing that customers will be able to do both for one price. Your marginal cost per customer across both tours is $4800. Customer Preferences Cruise Casino Customer 1 $7,000 $3,000 Customer 2 $2,000 $6,000 You know that about 21% of your customers decline cruises because of seasickness. At least 12% decline the casino trip saying they don't believe in gambling. As a rough approximation, you estimate that approximately 33% of your customers will never bundle. Given the preferences distribution, will mixed bundling increase profits? You must show the calculations that support your conclusion.Your software startup has just completed the latest version of BrainType, a mind-reading word processor that translates thoughts into text. Since you are the cutting-edge frontier, you have no direct competitors. As marketing manager, you must decide how to price BrainType. You commission a study that suggests that there are two markets: professional writers and dabbling hobbyists. There are one million professionals and two million hobbyists. Professionals are willing to pay up to $400 and hobbyists up to $100 for the full-feature version. A scaled-down version is worth $50 to hobbyists and nothing to professionals. Both versions are essentially free to produce. (a) What prices of the two versions generate the most revenue? (b) Suppose that, instead of the scaled-down version, the firm offers an intermediate version worth $200 to professionals and $75 to hobbyists. What prices generate the most revenue now? Is the firm better off selling the intermediate or scaled-down version?
- A firm with market power has an individual consumer demand of Q = 10 − P and total costs of C = 2Q. What is the optimal amount of this product to package in a single block? Multiple Choice 6 2 4 8You are the manager of a local sporting goods store and recently purchased a shipment of 60 sets of skis and ski bindings at a total cost of $25,000 (your wholesale supplier would not let you purchase the skis and bindings separately, nor would it let you purchase fewer than 60 sets). The community in which your store is located consists of many different types of skiers, ranging from advanced to beginners. From experience, you know that different skiers value skis and bindings differently. However, you cannot profitably price discriminate because you cannot prevent resale.There are about 20 advanced skiers who value skis at $400 and ski bindings at $275; 20 intermediate skiers who value skis at $300 and ski bindings at $400; and 20 beginning skiers who value skis at $200 and ski bindings at $350.What is your maximum revenue if you charge a separate price for skis and bindings?$ What is your maximum revenue if you sell skis and bindings as a bundle?$You are the manager of a local sporting goods store and recently purchased a shipment of 60 sets of skis and ski bindings at a total cost of $25,000 (your wholesale supplier would not let you purchase the skis and bindings separately, nor would it let you purchase fewer than 60 sets). The community in which your store is located consists of many different types of skiers, ranging from advanced to beginners. From experience, you know that different skiers value skis and bindings differently. However, you cannot profitably price discriminate because you cannot prevent resale. There are about 20 advanced skiers who value skis at $400 and ski bindings at $275; 20 intermediate skiers who value skis at $300 and ski bindings at $400; and 20 beginning skiers who value skis at $200 and ski bindings at $350. Determine your optimal pricing strategy.
- Roger Clark obtains long-stem roses from Fred’s Flowers each Friday for sale to the public. Fred generally sells Roger flowers that, if left over the weekend, would likely be unsalable the next week. Hence, he is willing to give Roger a good price on his remaining long-stem roses and to take back any roses that are not sold over the weekend and give Roger partial credit for them. Roses are sold to Roger in quantities or units of one dozen each and at a price of $10 per dozen. Roger sells the roses for $15 per dozen, and any remaining unsold over the weekend can be returned to Fred at a credit of $8 per dozen. Although the number of roses remaining to be sold at the end of the week varies, Fred is willing to let Roger have as many as six dozen each weekend and supply him with fresh flowers at the same price if Roger desires more than the quantity of “old” roses that Fred has. Characterize this decision problem both in terms of the various states of nature (demands) and in terms of the…The overall effect of advertising on economic efficiency is positive, since it tends to lead to increased sales. indeterminate, since it leads to increased excess capacity but may also guide consumers to better decisions. negative, since it utilizes resources that could otherwise be used to expand production. Advertising is not important for efficiency.As the manager of Smith Construction, you need to make a decision on the number of homes to build in a new residential area where you are the only builder. Unfortunately, you must build the homes before you learn how strong demand is for homes in this large neighborhood. There is a 60 percent chance of low demand and a 40 percent chance of high demand. The corresponding (inverse) demand functions for these two scenarios are P = 400,000 −400Q and P = 900,000 −250Q, respectively. Your cost function is C(Q) = 125,000 + 430,000Q. How many new homes should you build, and what profits can you expect? Number of homes you should build: homes Profits you can expect: $
- As the manager of Smith Construction, you need to make a decision on the number of homes to build in a new residential area where you are the only builder. Unfortunately, you must build the homes before you learn how strong demand is for homes in this large neighborhood. There is a 40 percent chance of low demand and a 60 percent chance of high demand. The corresponding (inverse) demand functions for these two scenarios are P = 400,000 −450Q and P = 600,000 −250Q, respectively. Your cost function is C(Q) = 170,000 + 256,000Q. How many new homes should you build, and what profits can you expect? a. Number of homes you should build: _____ homes b. Profits you can expect: $As the manager of Smith Construction, you need to make a decision on the number of homes to build in a new residential area where you are the only builder. Unfortunately, you must build the homes before you learn how strong demand is for homes in this large neighborhood. There is a 80 percent chance of low demand and a 20 percent chance of high demand. The corresponding (inverse) demand functions for these two scenarios are P = 300,000 −300Q and P = 800,000 −200Q, respectively. Your cost function is C(Q) = 180,000 + 260,000Q. How many new homes should you build, and what profits can you expect? Give typing answer with explanation and conclusionAs the manager of Smith Construction, you need to make a decision on the number of homes to build in a new residential area where you are the only builder. Unfortunately, you must build the homes before you learn how strong demand is for homes in this large neighborhood. There is a 60 percent chance of low demand and a 40 percent chance of high demand. The corresponding (inverse) demand functions for these two scenarios are P = 300,000 – 400Q and P = 500,000 – 275Q, respectively. Your cost function is C(Q) = 140,000 + 240,000Q. How many new homes should you build, and what profits can you expect? Number of homes you should build: homes Profits you can expect: $