In a statement to P&G shareholders, the Chief executive officer (CEO) of Gillette (which is owned by 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? Less responsive More responsive It responds the same

In a statement to P&G shareholders, the Chief executive officer (CEO) of Gillette (which is owned by 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? Less responsive More responsive It responds the same

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Derive the monopoly equilibrium, i.e., the profit maximizing price and quantity, as well as the firm's profit, for each of the demand functions given below, assuming the firm's total cost of q units of output is given by C(q) = 4q a) b) c) q=e q= -2p+ 16 20000 2 q=400 - 8p
A fried chicken franchise finds that the demand equation for its new roast chicken product, "Roasted Rooster," is given by 40 p0.6 where p is the price (in dollars) per quarter-chicken serving and q is the number of quarter-chicken servings that can be sold per hour at this price. Find E(p) E(p) = q= X Find the price elasticity of demand when the price is set at $3.70 per serving. At a price of $3.70, a 1% increase in price leads to a Interpret the result. At a price of $3.70, the demand is elastic They should raise X% decrease in demand. ✓X the price per serving in order to increase revenue.
Suppose the European Union (EU) was investigated and proposed a merger between two of the largest distillers of premium Scotch liquor. Based on some economists’ definition of the relevant market, the two firms proposing to merge enjoyed a combined market share of about two-thirds, while another firm essentially controlled the remaining share of the market. Additionally, suppose that the (wholesale) market elasticity of demand for Scotch liquor is −1.4 and that it costs $15.90 to produce and distribute each liter of Scotch. Based only on these data, provide quantitative estimates of the likely pre- and postmerger prices in the wholesale market for premium Scotch liquor. Instructions: Do not round intermediate calculations. Enter your final responses rounded to the nearest penny (two decimal places). Pre-merger price: $ Post-merger price: $
Le Jouet is a French firm, and it is the only seller of toy trains in France and Russia. Suppose that when the price of toy trains increases, Russian children more readily replace them with toy airplanes than French children. Thus, the demand for toy trains in Russia is more elastic than in France. The following graphs show the demand curves for toy trains in France (Dr) and Russia (DR) and marginal revenue curves in France (MRF) and Russia (MRR). Le Jouet's marginal cost of production (MC), depicted as the grey horizontal line in both graphs, is $12, and the resale of toy trains from Russia to France is prohibited. Assume there are no fixed costs in production, so marginal cost equals average total cost (ATC). PRICE (Dollars per toy train) 40 36 32 28 Total 24 20 16 12 8 4 0 Country France Russia France MR Price (Dollars per toy train) 20 20 2 4 6 8 10 12 14 16 18 20 QUANTITY (Millions of toy trains) N/A O True MC-ATC OF O False N/A (?) Single Price Quantity Sold (Millions of toy…
In 2006, the five leading suppliers of digital cameras in the United States were Canon,Sony, Kodak, Olympus, and Samsung. The combined market share of these five firmswas 60.9 percent. The leading firm was Canon, with a market share of 18.7 percent. Theown price elasticity for Canon’s cameras was –4.0 and the market elasticity of demandwas –1.6. Suppose that in 2006, the average retail price of a Canon digital camera was$240 and that Canon’s marginal cost was $180 per camera. Suppose you were the CEO of Kodak, what would you do to avoid its business failure? Please apply the specific tools from managerial economics to the case analysis
Answer choices are first blank: negative, positive, zero second blank: an equal number of, fewer, more
Please answer each step clearly and how to do it. Thank you
2. Derive the monopoly equilibrium, i.e., the profit maximizing price and quantity, as well as the firm's profit, for each of the demand functions given below, assuming the firm's total cost of q units of output is given by C(q) = 4q a) b) c) g=e=²p+16 20000 2 9= P q=400 - 8p
OC makes and sells an executive game for two distinct markets in which it currently has a monopoly. The fixed costs of production per month are $20,000, and variable costs per unit produced, and sold, are $40. The monthly sales can be thought of as X, where X = X1 + X2, with X1 and X2 denoting monthly sales in their respective markets. Detailed market research has revealed the demand functions in the markets to be as follows, with prices shown as P1 and P2: Market 1: P1 = 55 - 0.05X1 Market 2: P2 = 200 - 0.2X2 The management accountant believes there should be price discrimination; the price is currently $50 per game in either market. Required: a) What is the optimum price to charge in Market 1? b) What is the optimum quantity to produce in Market 2? c) The following statements have been made about price discrimination: 1) Price discrimination should be used if a business wishes to discourage new entrants into a market. 2) Price discrimination can be difficult to implement in…
The Jakarta Post - Coordinating Maritime Affairs Minister Luhut Pandjaitan said he wants to push for the emergence of a new player in the jet fuel or avtur business in an effort to lower airfares. The market is currently dominated by state-owned energy company Pertamina. Previously, President Joko Widodo criticized Pertamina for “monopolizing” the avtur business that was blamed for the high price of the commodity. “Because of a monopolistic market, the price isn’t competitive. Many want to sell avtur, and it will lead to lower prices and encourage efficiency.” Jokowi said. Do you agree with the statements? ? Use a relevant graph to help explain your answer. (Hint: Use graphical analysis to compare the condition under perfect competition and monopoly markets in your answer)
If a firm is practicing third−degree price discrimination and is charging a price of $8 per unit to consumers in Group A and a price of $10 to consumers in Group B, which of the following is true? A. Group A consumers have a lower price elasticity than Group B consumers. B. Group B consumers have a greater price elasticity than Group A consumers. C. Group A consumers have a greater price elasticity than Group B consumers. D. Group A consumers are less responsive to price changes than Group B consumers.
Suppose the European Union (EU) was investigated and proposed a merger between two of the largest distillers of premium Scotch liquor. Based on some economists’ definition of the relevant market, the two firms proposing to merge enjoyed a combined market share of about two-thirds, while another firm essentially controlled the remaining share of the market. Additionally, suppose that the (wholesale) market elasticity of demand for Scotch liquor is −1.4 and that it costs $14.80 to produce and distribute each liter of Scotch.Based only on these data, provide quantitative estimates of the likely pre- and postmerger prices in the wholesale market for premium Scotch liquor.Instructions: Do not round intermediate calculations. Enter your final responses rounded to the nearest penny (two decimal places).Pre-merger price: $ Post-merger price: $