The price for cigarettes sold by Big Tobacco Co Ltd was6.00 per packet in March 2018. During the month of March, the consumption of cigarettes was 1000 packets. However, the Board of Directors of Big Tobacco Co Ltd decided to increase the price by 25% during the month of April. As a manager you noted that price elasticity of demand was 0.8. As a manager Big Tobacco Co Ltd: Advise your management ofthe strategy that could be adopted by your firm to maintain sales.
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The price for cigarettes sold by Big Tobacco Co Ltd was6.00 per packet in March 2018. During the month of March, the consumption of cigarettes was 1000 packets. However, the Board of Directors of Big Tobacco Co Ltd decided to increase the price by 25% during the month of April. As a manager you noted that price elasticity of demand was 0.8. As a manager Big Tobacco Co Ltd:
Advise your management ofthe strategy that could be adopted by your firm to maintain sales.
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- Question 1 The Potomac Range Corp manufactures a line of microwave ovens costing $500 each. Its sales have averaged about 6,000 units per month during the past year. In August, Potomac's closest competitor, Spring City Stove Works, cut its price for a closely competitive model from $600 to $450. Potomac noticed that its sales volume declined to 4,500 units per month after Spring City announced its price cut. What is the arc cross elasticity of demand between Potomac's oven and the competitive Spring City model? Would you say that these two firms are very close competitors? What other factors could have influenced the observed relationship? If Potomac knows that the arc price elasticity of demand for its ovens is -3.0, what price would Potomac have to charge to sell the same number of unit it did before the Spring City price cut?• RCO Manufacturing is an electronics manufacturer and retailer. Its main products are Computers, PCs and calculators. Market research has suggested that the price elasticity of demand for each product is: Ultrabook: 1.5; PC : 2.5; calculator: 0.6 In an attempt to improve revenue the managers of the firm have decided to increase all prices by 10%. 1. You have been asked to evaluate the planned price increases. Would a 10% price reduction have been better for some or all of the products?Your market research unit submitted the income elasticity of demand estimate for non-fed ground beef at 1.94. The economic managers reported that due to a Pandemic the economy will slide into a deep recession and incomes on average are expected to decrease by 15 percent over the next two years. As manager of a meat processing plant, what will be the effect of your purchase of non-feed cattle beef?
- Problem 07-03 (algo) Suppose the own price elasticity of market demand for retail gasoline is -0.6, the Rothschild index is 0.4, and a typical gasoline retailer enjoys sales of $1,800,000 annually. What is the price elasticity of demand for a representative gasoline retailer's product? Instruction: Enter your response rounded to two decimal places. If entering a negative number, be sure to use the negative (-) sign.PROBLEM SOLVING. Solve for what is asked far. Use the space provided for your answer and complete solution. 1. Lee, a programmer, earned P350,000 in 2010, but in 2011, he began to manufacture compute monitors. After one year, he submitted the following data to his accountant. • He stopped renting out his cottage for P35,000 a year and used it as his factory. • The market value of the cottage increased from P700,000 to P710,000. • He spent P50,000 on materials, phone, utilities, etc. • He leased machines for P100,000 a year. • He paid P150,000 in wages. • He used P100,000 from his savings account, which pays five 5% interest a year. • He borrowed P400,000 at 10% a year from the bank. • He sold P1,600,000 worth of monitors. • Normal profit is P250,000 a year. Compute for the following: • Lee's explicit costs ( • Lee's implicit costs (. • Lee's economic profitThe Potomac Range Corporation manufactures a line of microwave ovens costing $500 each. Its sales have averaged about 6,000 units per month during the past year. In August, Potomac’s closest competitor, Spring City Stove Works, cut its price for a closely competitive model from $600 to $450. Potomac noticed that its sales volume declined to 4,500 units per month after Spring City announced its price cut. a. What is the arc cross elasticity of demand between Potomac’s oven and the competitive Spring City model? b. Would you say that these two firms are very close competitors? What other factors could have influenced the observed relationship? c. If Potomac knows that the arc price elasticity of demand for its ovens is −3.0, what price would Potomac have to charge to sell the same number of units it did before the Spring City price cut?
- Vodafone has one of the world’s largest mobile communications networks, with 83,900 employees serving over 370 million customers across more than 30 countries. With 2,200 retail stores and a further 10,300 branded franchises throughout the world. Vodafone products include messaging services for businesses and consumers, smartphones, mobile handsets and tablets. . Its current strategy is aimed at increasing the ‘average revenue per user’ through offering more and more added value mobile services. Detlef Schultz, winner of the 2011 Procurement Leader Award, was brought in to be the Global Supply Chain Management Director and chief executive officer of the Vodafone Procurement Company. His role was to not only manage the complexity of the procurement and supply chains for both goods and services but also fundamentally transform several fragmented supply chains into a single global function. The Vodafone Procurement Company was set up in 2008 with its headquarters based in Luxembourg.…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. Question: What recommendations can you make to increase total revenue?The Potomac Range Corporation manufactures a line of microwave ovens costing $500 each. Its sales have averaged about 6,000 units per month during the past year. In August, Potomac's closest competitor, Spring City Stove Works, cut its price for a closely competitive model from $600 to $545. Potomac noticed that its sales volume declined to 4,500 units per month after Spring City announced its price cut. What is the arc cross elasticity of demand between Potomac's oven and the competitive Spring City model? 1.5 –1.5 0 3.0 If Potomac knows that the arc price elasticity of demand for its ovens is −1.0, what price would Potomac have to charge to sell the same number of units it did before the Spring City price cut? $375 $450 $429 $667