The president of a small company that provides vending machine services asks you, the company's economist, to forecast changes in consumer snack purchases associated with a proposed price change. You conduct a survey and find that if the price of a snack increases from $1.00 to $ 1.25, the quantity demanded for snacks I will decrease from 56 million to 50 million. per year. Each candy cost the company $ 0.50. This is the only cost to the company. The company president expects well- written one or two short paragraphs with correct grammar, sentence structure, and an accurate understanding of economic issues. Your analysis should include a calculation of the price elasticity of demand using the mid-point formula and recommend whether the vending machine company should raise the price of snacks from $1.00 to $1.25, explaining the economic basis for your recommendation. Calculate the total revenue before the price change and after the price change. Calculate the change in the revenue after the price change.

The president of a small company that provides vending machine services asks you, the company's economist, to forecast changes in consumer snack purchases associated with a proposed price change. You conduct a survey and find that if the price of a snack increases from $1.00 to $ 1.25, the quantity demanded for snacks I will decrease from 56 million to 50 million. per year. Each candy cost the company $ 0.50. This is the only cost to the company. The company president expects well- written one or two short paragraphs with correct grammar, sentence structure, and an accurate understanding of economic issues. Your analysis should include a calculation of the price elasticity of demand using the mid-point formula and recommend whether the vending machine company should raise the price of snacks from $1.00 to $1.25, explaining the economic basis for your recommendation. Calculate the total revenue before the price change and after the price change. Calculate the change in the revenue after the price change.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A small company of science writers found that its rate of profit (in thousands of dollars) after t years of operation is given by P'(t) = (31+6) (1² +41+6) (a) Find the total profit in the first five years. (b) Find the profit in the seventh year of operation. (c) What is happening to the annual profit over the long run? (a) The total profit in the first five years is $. (Round to the nearest dollar as needed.) (b) The profit in the seventh year of operation $. (Round to the nearest dollar as needed.) (c) Select the correct choice below and, if necessary, fill in the answer box to complete your choice. OA. Over the long run, the annual profit is increasing without bound. OB. Over the long run, the annual profit is decreasing without bound. OC. Over the long run, the annual profit is decreasing and approaching $ (Round to the nearest dollar as needed.) D. Over the long run, the annual profit is increasing and approaching $ (Round to the nearest dollar as needed.)
A company makes and sells toasters. To make the toasters there is a fixed monthly cost of $27,000 and an additional production cost of $30 per toaster. The toasters sell for $75 each. (a) Write down the cost function. (b) Write down the revenue function. (c) Find the profit function. (d) Find the break even point. (e) How many toasters must the company sell to make a 15% profit?
Cask'n'Cork wine shop has a markup rate of 16.7% on cost. What price is the selling price for a bottle of wine that costs $23.40? Round the answer to the nearest cent if necessary. Selling Price = $
Calculate price per unit if total revenue is $1000 and the quantity sold is 50 units
An article has a Selling Price :Rs. 12 Per UnitVariable Cost : 2/3 of SPFixed Cost :Rs. 40,000You are required to calculate number of sales to earn profit of Rs. 8000.(b) Also show the Brek-Even Price
When the variable cost is reduced for linear total cost and revenue lines, the breakeven point decreases. This is an economic advantage because:a. the revenue per unit will increase.b. the two lines will now cross at zero. c. the profit will increase for the same revenue per unit.d. the total cost line becomes nonlinear.
Can you please do part d and e?
When the TC = TR can you say that you are breakeven or not? Why or why not
how much if a barrel of oil does costs Chevron to produce for sale in the crude oil market, without refining costs. Show actual refernece if already calculated or show calculation to get the number.
Q VC AVC TC ATC MC $30 1 $40 $50 3 $80 4 $90 What are the fixed costs? If the firm can sell its product for $80, it will sell (circle one) of $ units for a profit/loss/breakeven
Calculate profits if total revenue is $6500 and the total cost is $2300
What are some examples of "book cost" in Engineering Economics?