Explain the type of pricing strategy that you as the manager of a company would implement for Good X and Good Y with the following price elasticity of demand co efficients. Usediagrams to motivate your answer. a). Good X: 2.3 b). Good Y: 0.6
Q: In the Current Events article, it mentioned how DoorDash is trying to increase its amount of…
A: P = 20 - 0.04Q Total revenue = Price * Quantity TR = (20 - 0.04Q) * Q TR = 20 Q - 0.04 Q2 MR = 20 -…
Q: Suppose you are the managing director of a firm that produces two goods: A and B. The price…
A: Elasticity is a vital economic measure, significantly for the sellers of products or services,…
Q: Suppose that your demand schedule for pizza is as follows: Price Quantity of Pizzas Demanded…
A:
Q: Suppose that the demand function of a new face cream is described by the demand function: Q(P, A) =…
A: Price elasticity of demand is a measurement of the change in the consumption of a product in…
Q: The managers of Roosevelt's (a local upscale bar) are considering charging an admission fee on…
A: 1) Using just the beverage charge per unit:
Q: Suppose widgets have a price elasticity of demand equal to -1,95 and a cross elasticity of demand…
A: Given, Price elasticity of demand of widgets = -1.95 Cross elasticity of widgets = 2 dandles
Q: The demand curve for a product is given by Qdx = 1,200 − 3Px − 0.1Pz where Pz = $300. a. What is the…
A: a. Own price elasticity of demand:
Q: efer to the Unit 3 Learning Journal Elasticity Tables document to complete the assignment.…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Netflix is the largest online DVD rental service offering flat rate online streaming to customers in…
A: The solve this Queaton we need to analyze the relationship between price, total revenue, and the…
Q: The Future Flight Corporation manufactures a variety of Frisbees selling for $2.98 each. Sales have…
A: A. The price change in Soaring Frisbees is -26% (from $3.49 to $2.59). The change in quantity of…
Q: i) Calculate the amount of Botch Potato bought in the market. ii) Estimate the own price elasticity…
A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…
Q: Suppose that your demand schedule for pizza is as follows: Price Quantity of Pizzas Demanded…
A: Price elasticity of demand refers to a measure to explain the responsiveness of the quantity…
Q: Having trouble deriving the elasticity of demand for this problem:Consider two demand functions: a)…
A:
Q: Refer to the Unit 3 Learning Journal Elasticity Tables document to complete the assignment.…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: A local firm produces three types of Pizza, for delivery to homes in the area. The owners have…
A: Q1= 920, Q2 = 880 , P1=9, P2 = 10 eP =[ (880-920) / (10-9)] X (9/920) eP = 0.39 (ignoring the…
Q: As competitors enter a market, demand becomes more meaning the demand curve shifts and becomes O…
A: Answer: If many competitors enter the market then the buyers will have more options from where they…
Q: 9. Golden Shore is a popular beach in Chicago located on Lake Michigan downstream of All- Leather's…
A: It is given that the demand function is x = 40 – 2p The cost of a round trip (p) from Hyde park is…
Q: Comics The demand curve for original Iguanawoman comics is given byq=(400-p)²/100 (0 ≤ p ≤ 400) ,…
A: Answer a) Price elasticity = Pq∂q∂P ∂q∂P=2(400−P)100…
Q: Apple and Samsung are two competing brands in smartphone device market. Suppose that when the price…
A: Given: Price of apple (Pa1 ) = $1000 Quantity demanded (Qa1 ) = 28,000 Price of apple increases (Pa2…
Q: Cikli is the manager of a firm that receives a revenue of RM3000 per month from product X and RM7000…
A: (a) The change in total revenue can be calculated as follows.
Q: The demand function for a certain brand of compact discs is given by p = -5x² 3x + 35 where p is the…
A: The concept of price elasticity of demand is used to explain the responsive nature between the…
Q: You face demand P=240 - 2Q^D. You have cost function: TC= 100 + 20Q. 1.) What is the…
A: P = 240 - 2Qd TC = 100 + 20Q MC = 20
Q: Explain the type of pricing strategy that you as a manager of a company would implement for Good X…
A: a. The price elasticity of demand is the degree of responsiveness from the part of the consumer…
Q: Refer to the table below to answer the questions. Use the mid-point formula. $4 10 B 9. 7 6 Demand 1…
A: Since you have posted a question with multiple parts, we will solve only the first part. To get…
Q: Demand for Corn Flakes is: P = 24-Q. Supply of Kellogg's Corn Flakes is: P = 2+ Q. Now a generic…
A: Given: The demand for Corn Flakes is: P = 24-Q The supply for Corn Flakes is: P = 2+Q A generic…
Q: A local store estimates its typical customer's inverse demand is P = 7.8 - 1.9Q. and it knows the…
A: P=7.8-1.9Q MC=$0.74
Q: Let's assume a ski resort has the following demand function for hotels rooms 90=50-10-PL where P is…
A: Cross price elasticity shows percentage change in quantity demanded of good 1 due to percentage…
Q: King of Hearts The King of Hearts, a neighborhood pub in a small midwestern town, is owned and…
A: Given information Kinga of Hearts wants to increase the sale . In order to increase the sell…
Q: When trying to assess differences in her customers, Claire—the owner of Claire’s Rose…
A: The demand function represents the relationship between quantity demanded and the price level. The…
Q: More fast food restaurants will enter the market, and Manuela's demand curve will become more…
A:
Q: Greentech- a high technological pharmaceutical company, has developed a clot-dissolving drug called…
A: 1) When pricing their drugs , a pharmaceutical company first analyses the drugs's uniqueness ,…
Q: Knitex wants to maximize its profits. It produces a product with many substitutes and requires a…
A: Elasticity:- A demand that is elastic experiences a significant shift in quantity demanded as a…
Q: The market research department of Paradox Enterprises has determined that the demand for earrings is…
A: Given: Q = 1,000 - 5PX + 0.05I - 50PZ Px = 5, I = 20,000, PZ = 15
Q: Nile.com, the online bookseller, wants to increase its total revenue. One strategy is to offer a 10%…
A: A. The mid-point formula can be used to calculate the price elasticity of demand for Group A and…
Q: Vijay diary is selling flavored milk and buttermilk in packets of 150 ml. The diary sells 2000…
A: A measurement of how responsively demand changes in response to changes in the price of related…
Q: suppose the quantity of stocks purchase by jones family is110 pounds per year when price is $2.10…
A: Elasticity of demand can be calculated as follows:
Q: As competitors enter a market, demand becomes more meaning the demand curve shifts and becomes O…
A: A demand is said to be elastic, when a given percentage change in price results in proportionately a…
Q: Demand for Corn Flakes is: P = 24-Q. Supply of Kellogg's Corn Flakes is: P = 2+ Q. Now a generic…
A: Here we calculate the boxes of Kellogg's corn Flakes will sell by using the give information , so…
Q: You are the manager of Zokia Ghana Limited, a producer of beans. In Ghana, it is possible to produce…
A: Since you have asked multiple questions with multiple parts we will solve the first three parts for…
Q: Mr. Haris has the following demand equation for a certain product: Q = 30 - 2P. a. At a price of…
A: Given Q = 30 - 2P (a) When P = 7, Q = 30 - (2 x 7) = 30 - 14 = 16 Elasticity = (dQ/dP) x (P/Q) = -…
Q: Module 7, Pricing Case The managers of Roosevelt's (a local upscale bar) Thursday nights. They…
A: Using just the beverage charge per unit:MR= 71/3- (4/3)*Q , P = 71/3- (2/3)*QFor MR=MC=$2:71/3 –…
Q: If a company successfully advertises its product, do we expect the price elasticity of demand for…
A: Here, it is given that a firm is successfully able to advertise it's product, it implies that the…
Q: ndividual A's inverse demand equation is P 5 - 1/2QP, ndividual B's inverse demand equation is P 20…
A:
Q: Cikli is the manager of a firm that receives a revenue of RM3000 per month from product X and RM7000…
A: Hey, Thank you for the question. According to our policy we can only answer up to 3 sub parts per…
Q: As competitors enter a market, demand becomes more meaning the dema curve shifts and becomes O…
A: If the firm is producing a good with no close competition, then the firm will have pricing power on…
Explain the type of pricing strategy that you as the manager of a company would implement
for Good X and Good Y with the following price
Usediagrams to motivate your answer.
a). Good X: 2.3
b). Good Y: 0.6
Step by step
Solved in 2 steps with 2 images
- 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?16. Revenue with Substitutable Products. The Camera Shop sells two popular models of digital single lens reflex (DSLR) cameras. The sales of these products are not inde- pendent; if the price of one increases, the sales of the other increases. In economics. these two camera models are called substitutable products. The store wishes to estab- lish a pricing policy to maximize revenue from these products. A study of price and sales data shows the following relationships between the quantity sold (N) and price (P) of each model: NA 195 0.6PA + 0.25PB N = 301+0.08PA-0.5PB a. Construct a model for the total revenue and implement it on a spreadsheet. b. Develop a two-way data table to estimate the optimal prices for each product in order to maximize the total revenue. Vary each price from $250 to $500 in incre- ments of $10.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
- 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 demandAs competitors enter a market, demand becomes more meaning the demand curve shifts and becomes O elastic: in: flatter O elastic; out; flatter O inelastic; in; stceper O inclastic: cout flatterHans is a butcher in Washington. The following contains data on prices and weekly sales at his shop Good Beef Chicken Price 9.00/lbs $4.00/lbs Quantity 400 lbs 300 lbs ShS He estimates that the own price elasticity for beef is 2 and for chicken is .75. He also estimates that the cross price elasticity for chicken is .60. His current revenue from the sale of these two goods is making a total of $4800/week. In the spirit of the return to good times and outdoor grilling, he has decided to lower the price of beef for the summer, from $9.00 to $8.55. Overall, Hans can expect to take in dollars in revenue, given the information in this problem? (Revenue = Price x sales). Record your answer without a dollar sign and without a comma. Helpful Hint: In this problem, we are not changing the price of chicken.
- One of South Africa’s cellphone operators, Cell C, is changing their overall business strategy.The focus is now on providing customers with “affordable and accessible services." To do thisthey need your economic expertise.They know that when price for premium services increases from R2/minute to R2.2/minute thedemand for their services falls from 12 customers to 10 customers.a. Using the point formula calculate the price elasticity of demand. b. What type of elasticity does Cell C’s services have over this price range? Motivate youranswer.6. Al's Appliancemart has market power in selling refrigerators. He just got in a shipment of undamaged refrigerators. Al has determined that there are two different types of buyers. One group are high demanders who have a more inelastic demand but tend to be picky about how nice their appliances look (they won't buy a dented one). Other buyers, low demanders, have a relatively more elastic demand, but also don't mind having a refrigerator with some dents. He pays $600 for each refrigerator from his supplier. 3/3 He has calculated that the high and low demander demand functions follows: Low: P = 1,000-0.5QL (QL = 2,000 - 2P) High: P = 1,600 - QH (QH = 1,600 – P) How much profit could Al earn if he sells them as is? How many should he add dents to (with a hammer) in order to maximize profit? What price would he then put on the non-dented and the dented refrigerators and how many would he sell of each? What would his profit then be?Suppose you are the managing director of a firm that produces two goods: A and B. The priceelasticity of demand for good A is 0.75 and for good B it is 2.5. The firm is experiencing seriouscash flow problems and you have to increase total revenue as soon as possible. If you were ina position to set the price for these two goods, what would be your pricing strategy for eachproduct?
- Supposed you are the producer of spinach, carrots and beetroot and you are in a position to decide at which price you will offer these products for sale. What will be your pricing strategy for each of these products order to increase their total revenue? In your analysis you found that the price elasticity of demand for spinach is 0,4, for carrots is 1,0 and for beetroot is 1,2. Explain the decision in each caseP t onces In a statement to P&G shareholders, the Chief executive officer (CEO) of Gillette (which is owned by P&G) indicated, "Despite several new product launches, Gillette's advertising-to-sales declined dramatically... to 5 percent last year. Gillette's advertising spending, in fact, is one of the lowest in our peer group of consumer product companies." If the elasticity of demand for Gillette's consumer products is similar to other firms in its peer group (which averages -4.5), what is Gillette's advertising elasticity? Instructions: Enter your response rounded to two decimal places. Is Gillette's demand more or less responsive to advertising than other firms in its peer group? O Less responsive More responsive It responds the same.Explain how the demand curves for normal productsand to, prestige products differ. What are demandshifts and why are they important to marketetS? Howdo firms go about estimating demand? How can marketetS estimate the elasticity of demand?