Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
9th Edition
ISBN: 9781259290619
Author: Michael Baye, Jeff Prince
Publisher: McGraw-Hill Education
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Chapter 2, Problem 12PAA
To determine
To explain:
The impact on
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Suppose you are the economic adviser ofa company producing three brands of mobile pnones;Nokia 10, Samsung X and iPhone 7. Suppose further that, your company currently sells 120units of iPhone Z at e800 per unit, 150 units of Samsung X at e800 per unit and 200 units ofNokia 10 at e100 per unit, but in a bid to maximize profit, the company's managing directorproposes an increase in price of Samsung X from e800 to e1000 per unit for which quantitydemanded is anticipated to fall from 150 to 100 units; iPhone Z from e800 to e 1200 per unitfor which quantity demanded is anticipated to fall from 120 to 100 units; and Nokia 10 from100 to 200 per unit for which quantity demanded is expected to fall from 200 to 100 unitsUsing the mid-polint formula. compute the price elasticity of demand for each brand.From your answer in i, what is the type and economic interpretatiom of each brand'sii.value of elasticity.
You are the country manager of a firm that produces and markets a generic type of soft drink in a competitive market in Ghana. In addition to the large number of generic products in your market, you also compete against major brands such as Coca-Cola and Pepsi. Suppose that, due to the successful lobbying efforts of sugar producers in Ghana, Parliament levies a ȼ1.20 per pound tariff on all imported raw sugar: the primary input for your product. In addition, Coke and Pepsi launches an aggressive advertising campaign designed to persuade consumers that their branded products are superior to generic soft drinks. How will these events impact the market outcomes of generic soft drinks if effect of the tariff is larger the effect of advertising of Coke and Pepsi on the generic type of soft drink? [Explain with an appropriate graph]
You are the country manager of a firm that produces and markets a generic type of soft drink in a competitive market in Ghana. In addition to the large number of generic products in your market, you also compete against major brands such as Coca-Cola and Pepsi. Suppose that, due to the successful lobbying efforts of sugar producers in Ghana, Parliament levies a ȼ1.20 per pound tariff on all imported raw sugar: the primary input for your product. In addition, Coke and Pepsi launches an aggressive advertising campaign designed to persuade consumers that their branded products are superior to generic soft drinks. How will these events impact the market outcomes of generic soft drinks if effect of the tariff is larger the effect of advertising of Coke and Pepsi on the generic type of soft drink?
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