Yulia's annual demand for home-delivered coffee beans is given by MWTP(Q) = 500 - 5xQ, where Q is measured in kilograms of beans. In order to use the only delivery service available in Odesa, she must pay an annual membership fee, and then she pays 2400 for each kilogram purchased in that period. What is the largest membership fee Yulia is willing to pay? O 89000 O 28000 O 22000 O 81000 O None of the above.
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- You plan to purchase a car for $28,000. Its market value will decrease by 20% per year. You have determined that the IRS-allowed mileage reimbursement rate for business travel is about right for fuel and maintenance at $0.485 per mile in the first year. You anticipate that it will go up at a rate of 10% each year, with the price of oil rising, influencing gasoline, oils, greases, tires, and so on. You normally drive 15,000 miles per year. What is the optimum replacement interval for the car? Your MARR is 9%.No written by hand solution 4.7 An estimate of the demand function for household furniture produced the following results: F=0.0036 Y1.35R0.19P(−0.37) r2=0.996 where F = furniture expenditures per household Y = disposable personal income per household R = value of private residential construction per household P = ratio of the furniture price index to the consumer price index The point price elasticity for household furniture is -0.37 or -1.95 or 1.35 or 7.11 and the income elasticity is -0.37 or -1.95 or 1.35 or 7.11 . According to the estimated model, a 10 percent increase in the value of private residential construction per household Increase or decrease the quantity demanded by 1.4 or 1.9 or 5.1 percent.You plan to purchase a car for $28,000. Its market value will decrease by 20% per year. You have determined that the IRS-allowed mileage reimbursement rate for business travel is about right for fuel and maintenance at $0.505 per mile in the 1st year. You anticipate that it will go up at a rate of 10% each year, with the price of oil rising, influencing gasoline, oils, greases, tires, and so on. You normally drive 15,000 miles per year. Your MARR is 9%.
- E4 ACME Corporation produces a variety of products for its diverse customer base, including the jet-powered pogo stick and jet-propelled tennis shoes, both of which are essential for catching roadrunners. Currently, they produce 40,000 engines per year that are used in the production of these two products. As the production manager for thisproduct line, you have determined that last year’s costs to produce the engines included: $99,600 in direct material expenses, $298,800 in direct labor expenses, $224,100 in variable overhead costs (i.e. power to operate the equipment), and $116,200 in fixed overhead costs (i.e. utilities to keep the factory operational). ACME plans to produce these engines only for the next 6 years. If they produce the engines in-house, they anticipate that direct material costs will increase at a rate of 5% each year. Further, they anticipate that labor costs will increase at a rate of 6% per year and variable overhead costs will increase at a rate of 3% per year.…A ski resort in the White Mountains has conducted market and cost studies, and has determined that the demand and supply for ski-lift tickets at their resort are represented by: Qd=1750 - 5P - 8PR + 2PB; Qs=50 + 20P - 3PE. In these equations, P represents the price of a full-day lift ticket, in dollars per ticket; PR is the price of a ski-rental package; PB is the price of a pint of beer at the local pub in the nearby town; and PE is the price per megawatt hour for the electricity used to run the chair lifts on the ski slopes. Based on the equations above, determine whether the beer in the local pub is a substitute or complement to skiing. Briefly explain your answer. Suppose the price of a ski-rental package is $20, the price of a pint of beer is $5, and the price of electricity is $150 per megawatt hour. Calculate equilibrium price and quantity of ski-lift tickets. Now consider the more general relationship between the price of lift tickets and the price of ski-rental packages.…(Q1) Many software companies, after years of providing unlimited free telephone technical support for their products, began to charge for these services (typically after an initial start-up period of 90 days). Most companies offer two pricing plans. For instance, Lotus Development offers users of their spreadsheet software the option of paying either (i) $2.00 per minute for telephone support or (ii) a $129 flat charge for a year of unlimited toll-free calls. Question 1: Consider a customer with a yearly (expected) demand for service support of P = 11 – 0.1Q, where P is the price per minute and Q is the number of minutes of calls made per year. How many calls would this customer make under plan (i)? Why? How many calls would he or she make under plan (ii)? What would be the annual cost to this customer under each plan? Explain your answer. Question 2: Which plan would this customer choose? Explain your answer.
- Consider the general supply function Qs = 60+5P-12Pi+10F Derive the equation of the supply function when Pi = 90 dollars and F = 20.For a certain commodity the demand equation is given by Demand = −30p + 1000. At a price of $5, 600 units of this commodity are supplied. (a) If the supply equation is linear and the market price is $10, find the supply equation. (b)If the price of this commodity increases by $3 per unit, what effect will this have on the supply and demand of the commodity?Suppose we alocate a foxed supply of a depletable resource between two periods in a dynamically efficient way. Assume further that the demand function is constant in the two periods and the marginal willingness to pay is given by the formula P= 7-0.46q while the marginal cost is constant at $1 per unit. The total supply ls 18 units and the discount rate is 2%. What is the marginal user cost during the first period?
- As a manager of a small business, you are considering to introduce a new product. The production requires a new machine. You figure out that you could buy it for $190,000, but the price could be in between $180,000 and $200,000. Because of the budget limitation you can only pay 60% of the machine price with your own saving. You will borrow the other 40% with an interest rate around 9% per year (but subject to change in between 8.5% and 10%). The demand of this product is predicted to be 15,000 per year and but could be in between 14800 and 15500. The unit price could be in between $2 and $3, and now you believe that $2.5 is a reasonable price right now. The raw material cost is estimated to be $0.9 but could be in between $0.5 and $1.2. The operation cost of the equipment is around $0.2 for one product but could be in between $0.1 and $0.25. The maintenance cost for this equipment is estimated to be $2000 per year but could be in between $1500 and $2300. Suppose you could always invest…Cloud Cafe is considering the sale of promotional mugs. It can have the mugs produced by one of two suppliers. Supplier A will charge them a setup fee of Php13000 plus Php40 for each mug; Supplier B has no setup fee and will charge Php60 per mug. The company estimates its demand for mugs to be given by Q=32000-400P, where P is the price in Philippine peso and Q is the number of mugs (hint: the price equation is P=80-0.0025Q). In order to make sound decisions, the company's management asked the assistance of their student trainees from FEU in assessing the cost and revenue implications of the promotional campaign. 1. If the company wants to give the mugs away for free, how many mugs should it order? 2. What is the company's marginal cost if Supplier A is chosen? 3. What is the company's marginal cost if supplier B is chosen? 4. If the company seeks to maximize profit from selling mugs and Supplier A is chosen, how many mugs should the company order? 5. If the company seeks to maximize…Suppose the current exchange rate is 115 yen per dollar. We currently have a demand for 50 units of our product when the unit price is 800 yen. The cost of producing and shipping the product to Japan is $6, and the current elasticity of demand is –0.15625. Find the optimal price to charge for the product (in yen) for each of the following exchange rates: 60 yen/$, 80 yen/$, 100 yen/$, 120 yen/$, 140 yen/$, and 160 yen/$. Assume the demand function is linear. use the following formula for demand: Demand = 175 - 0.15625 x Price