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: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 2E
To determine
The reason behind the lower
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The Ford F-150 (best selling vehicle in the U.S. for the last three decades) is currently priced at
about $40, 000 to $45, 000. Show what would likely happen to the amount of vehicles
offered for sale if the vehicle price went up to $52, 000.
Air Canada announces a 15% off sale on its flights, so fans can watch Toronto Raptors play against the Golden State Warriors in the NBA Finals. What effect will this sale have on Air Canada's flights to destinations other than Canada?
the cost of producing a bottle of zlurp is 1.50, and the competitive suppliers sell it at this price. Each whovillian will consume
Chapter 2 Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Knowledge Booster
Similar questions
- Demonstrate by means of a scenario / with practical examples , the usefulness of all the functions of price in an agribusiness .arrow_forwardThe Times-Herald is planning a special-edition magazine. The publishing expenses include fixed costs of $1200 and printing costs of 30 cents per magazine. The magazines will sell for 75 cents each, and advertising revenue is 20 cents per magazine. How many magazines must be sold to make a profit? Please show steps.arrow_forwardhas established that the relationship between the price for one of its products is approximately. In addition there is a fixed cost of $45,000 per year and the variable cost to manufacture the product is $45 per unit. What level of demand maximizes the total revenue? Ans. is Blank 1. What level of demand maximizes the total profit for this product? Ans. is Blank 2. Blank 1_____________ Blank 2_____________arrow_forward
- A retail store faces a demand equation for Roller Blades given by: Q = 180 - 1.5P where Q is the number of pairs sold per month and P is the price per pair in dollars. The store currently charges P = $80 per pair. At this price, determine the number of pairs sold. If management were to raise the price to $100, what would be the impact on pairs sold? On the store’s revenue from Roller Blades?arrow_forwardWyandotte Chemical Company sells various chemicals to the automobile industry. Wyandotte currently sells 30,000 gallons of polyol per year at an average price of $30 per gallon. Fixed costs of manufacturing polyol are $180,000 per year and total variable costs equal $360,000. The operations research department has estimated that a 15 percent increase in output would not affect fixed costs but would reduce average variable costs by 60 cents per gallon. The marketing department has estimated the arc elasticity of demand for polyol to be –2.0. How much would Wyandotte have to reduce the price of polyol to achieve a 15 percent increase in the quanity sold in percent? Such a price cut would increase or decrease total revenues from $900,000 to $ ? Total costs would be $ . and total profits would be $ ?arrow_forwardWyandotte Chemical Company sells various chemicals to the automobile industry. Wyandotte currently sells 30,000 gallons of polyol per year at an average price of $15 per gallon. Fixed costs of manufacturing polyol are $90,000 per year and total variable costs equal $180,000. The operations research department has estimated that a 15 percent increase in output would not affect fixed costs but would reduce average variable costs by 60 cents per gallon. The marketing department has estimated the arc elasticity of demand for polyol to be –2.0.a. How much would Wyandotte have to reduce the price of polyol to achieve a 15 percent increase in the quantity sold?b. Evaluate the impact of such a price cut on (i) total revenue, (ii) total costs, and (iii) total profits.arrow_forward
- Equilibrium Price: Cell Phones Worldwide quarterly sales of a brand of cell phones were approximately q = −p + 146 million phones when the wholesale price was $p. (a) If the cellphone company was prepared to supply q = 9p − 394 million phones per quarter at a wholesale price of $p, what would have been the equilibrium price?arrow_forwardThe owner of an Italian restaurant has just been notified by her landlord that the monthly lease on the building in which the restaurant operates will increase by 20 percent at the beginning of the year. Her current prices are competitive with nearby restaurants of similar quality. However, she is now considering raising her prices by 20 percent to offset the increase in her monthly rent. Would you recommend that she raise prices? Explainarrow_forwardEthanol and sugar are both made from sugarcane, and ethanol can be used as a fuel substitute for oil. Increasing oil prices cause the demand for ethanol to increase. This will cause the ______ sugar to ______ and its price to ______. demand for; increase; increase supply of; decrease; increase demand for; decrease; decrease supply of; increase; increasearrow_forward
- If the demand and supply curves for a commodity are defined as follows, Qd=200-0.6(p) Qs=80+1.4(p) What would be the best option to represent the equilibrium price and equilibrium quantityarrow_forwardYou manage a large retail supercenter that sells groceries and other products to 30,000 customers per week. Currently, you employ 80 check-out clerks and 10 automated check-out machines (customers scan and pay for their purchases without a clerk's assistance). Each clerk is paid wages and fringe benefits of 800 dollars per week. It also cost you 800 dollars per week to lease each machine (price includes installation, software support and servicing). A vendor has offered you to lease you additional machines at this price. You estimate that by leasing 10 more machines you can meet your service requirements with 30 fewer clerks. Should you lease the additional machines or continue to service your customers with your current input mix? You conduct additional analysis and estimate that you can service the 30,000 customers with the following combinations of clerks and machines. Calculate the total costs for each of these combinations. What combination of inputs serves the customer at the…arrow_forwardJapan Airline is interested in purchasing new commercial aircraft from us manufacturer Boeing at a price of 89 million dollars per plane. What is the difference in the Yen price between month 1 and month 2? During which month is Japan Airlines more likely to buy more planes? Why? Explain your answer using the numbers from the chart and show your math.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning