c. Explain why demand for Carmel cigarette tend to be more inelastic in the short run than in the long run. d. XYZ company specializes in supplying online sofa bed and wish to increase its total revenue. Based on the online data, XYZ company knows that its customers can be divided into two distinct markets: West coast Malaysia (WCM) and East coast Malaysia (ECM). The following table shows how the two regions respond to a 30% rebate: Volume of sales before West coast Malaysia East coast Malaysia the 30% rebate (sales per month) (sales per month) 500 300 Volume of sales after the 30% rebate 2000 400 į Using the midpoint method, calculate the price elasticities of demand for both regions. ii. If XYZ company wants to boost its sales and income, should the rebate be offered to Wes coast Malaysia or East coast Malaysia, or both regions, o neither regions? Justify your answer.

c. Explain why demand for Carmel cigarette tend to be more inelastic in the short run than in the long run. d. XYZ company specializes in supplying online sofa bed and wish to increase its total revenue. Based on the online data, XYZ company knows that its customers can be divided into two distinct markets: West coast Malaysia (WCM) and East coast Malaysia (ECM). The following table shows how the two regions respond to a 30% rebate: Volume of sales before West coast Malaysia East coast Malaysia the 30% rebate (sales per month) (sales per month) 500 300 Volume of sales after the 30% rebate 2000 400 į Using the midpoint method, calculate the price elasticities of demand for both regions. ii. If XYZ company wants to boost its sales and income, should the rebate be offered to Wes coast Malaysia or East coast Malaysia, or both regions, o neither regions? Justify your answer.

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:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 8E: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per...

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The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?
Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned, however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(1) the concept of elasticity of demand, (2) why raisingprices without understanding the elasticity would bea bad move, (3) your recommendations for measurement, and (4) the potential impact on profits for elasticand inelastic demand
which option is right? is it the last one?
Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned. however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(I) the concept of elasticity of demand, (2) why raisingprices without undetstanding the elasticity would bea bad move. (3) your recommendations for measurement. and (4) the potential impact on profits for elasticand inelastic demand
Please answer fast
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