a management consultant has been asked to calculate and analyze market demand for a new video game that is about to be offered in both retail (R) and wholesale (W) customer over the internet. The client estimates a Fixed Cost of 750,000 per year and a Marginal cost of 20/unit. Based on their market study, the following demand functions were derived: Pr = 62.50 – 0.0005Qr and Pw = 50 - 0.002Qw; Pr is the Price for Retail, Pw is the price for wholesale, Qr is the quantity for Retail and Qw is the quantity for wholesale, Complete the table below by calculating the quantity demanded both for retail and wholesale, market demand, Total Revenue, Total Cost and Profit. PRICERetail Demand Total Revenue (P x Q)Total CostPROFIT65 60 55 50 45 40 35

Given: Fixed Cost = $750,000 per year Marginal cost = Variable cost = $20/unit Demand function for…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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a management consultant has been asked to calculate and analyze market demand for a new video game that is about to be offered in both retail (R) and wholesale (W) customer over the internet. The client estimates a Fixed Cost of 750,000 per year and a Marginal cost of 20/unit. Based on their market study, the following demand functions were derived: Pr = 62.50 – 0.0005Qr and Pw = 50 - 0.002Qw; Pr is the Price for Retail, Pw is the price for wholesale, Qr is the quantity for Retail and Qw is the quantity for wholesale,

Complete the table below by calculating the quantity demanded both for retail and wholesale, market demand, Total Revenue, Total Cost and Profit.

PRICE	Retail Demand	Total Revenue (P x Q)	Total Cost	PROFIT
65
60
55
50
45
40
35

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