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- Redleaf company's market research department works on the manufacture and marketing of a winter tire for vehicles. Currently the price is 10$, and the demand is 13000 units. When the price is increased to 15$, the company expects the demand to be 8500 units (assume that price is linearly related to demand.). Company is following a make-to-order policy for their production, meaning that they make production as much as ordered from their dealers. The dealers make orders 3 times a year, on January, May and September. The company has 23 dealers, who do not have any capacity restriction on their orders. Yet, the above information is a country-wise research, and shows the aggregate demand (sum of all dealers' orders) for each price. Regardless of the production amount, the company faces with a 2170$ of administrative cost for production, in addition to 1,3 $ cost of raw materials and labour costs per each units produced. If we define price as a function of demand (P(d)) using the…You are the manager of a firm that produces furniture. All your clients are in Kumasi (K) and Accra (A). Suppose the monthly inverse demand function for your furniture in in Accra and Kumasi combined is P = 1200 - 4Q. Because of prohibitive cost of transporting furniture between Accra and Kumasi, you set up two plants, one in each town. The cost of producing furniture at each facility is given by CA (QA ) = 8000 + 6QA² and Ck(@k) = 8000 + 6Qk² where Q = Qa + Qk and Qa and Qk are the quantity of furniture produced at Accra and Kumasi respectively. Determine the profit maximizing amounts of electricity to produce in the two facilities, the optimal price and the profit.The price of crude oil increased to its highest level due to conditions which impacted supply. Historically, crude oil has traded at between 70 and 150 USD per barrel. But the price increased to over 200 USD in March 2022. Growing demand in Canada for crude to be turned into refined petroleum, coupled with a sharp fall in production in Saudi Arabia have both been factors in the price increase. Bauxite production in Saudi Arabia for 2017- 18 fell 65% year-on-year due to an agreement with OPEC. The Energy Information Administration predicts that global consumption of crude oil is likely to be greater than production by 20 million barrels this year. In the US, companies in the steel and alumina industry have put pressure on the US government to relax import controls, warning that otherwise they might run out of petrol. Commentators predict that most steel and alumina producers will be unaffected because crude is such a small part of their spending. a. Explain, using supply and…
- Assume a company expects to sell 6 million packages of Pop-Tarts Gone Nutty! in the first year after introduction but expects that 70 percent of those sales will come from buyers who would normally purchase existing Pop-Tart flavors (that is, cannibalized sales). The price for a package of Pop-Tarts Gone Nutty! is $1.30 and its variable cost is $0.65, when the price for a package of original Pop-Tart is $1.10 with variable cost of $0.30. Assuming the sales of regular Pop-Tarts are normally 300 million packages per year and that the company will incur an increase in fixed costs of $450,000 during the first year to launch Gone Nutty! will the new product be profitable for the company? Determine the unit contributions and the loss for every package cannibalized from the original product. (Round to the nearest cent.) Unit contribution original Pop-Tarts $ Pop-Tarts Gone Nutty! Loss for every package cannibalized Sfollowing to advice management. In the first semester of the 2019/2020 academic year, fees were pegged at ¢2500 and enrolment was 3150. In the second semester the fees went up to ¢2700 and the enrolment dropped to 2950. You further observed that in the 2019/2020 academic year, Central University increased their fees from ¢2600 to ¢2900 and the enrolment at VVU went up from 2150 to 3005. Calculate the arc price elasticity of demand, interpret your results and advice management of UEW on pricing. What explains this elasticity coefficient obtained in (i)? Calculate the arc cross-price elasticity of demand, interpret your results and determine the relationship between Central University and UEW.Question 9 A computer reseller needs to decide how many laptops to order next month. The lowest end laptop costs $220 and the retailer can sell these for $300. However, the laptop manufacturer already announced that they are coming out with a new model in a couple of months. Any laptops that will not be sold by the end of next month will have to be heavily discounted at half-price. The reseller also needs to consider that every time he fails to fulfill a laptop order, he stands to lose $25 for every unit. Based on the past months’ sales, the reseller estimates the demand probabilities for sales (S) as follows: P(0 units) = 0.3; P(1 units) = 0.4; P(2 units) = 0.2; P(3 units) =0.1. The reseller thinks it’s a good idea to conduct a survey on whether or not his customers are going to buy laptops and how many. The survey results will either be Yes (Y), No (N), or Don’t Know (DK). The probability estimates of the results based on the demand for the number of units are: P(Y|S = 0 units) =…
- You are the manager of a midsized company that assembles personal computers. You purchase most components such as random access memory (RAM) - in a competitive market. Based on your marketing research, consumers earning over $80,000 purchase 1.5 times more RAM than consumers with lower incomes. One morning, you pick up a copy of The Wall Street Journal and read an article indicating that input components for RAM are expected to rise in price, forcing manufacturers to produce RAM at a higher unit cost. Based on this information, what can you expect to happen to the price you pay for random access memory? The price (Click to select) for random access memory. Would your answer change if, in addition to this change in RAM input prices, the article indicated that consumer incomes are expected to fall over the next two years as the economy dips into recession? 0000 Yes - price will now be unchanged. Yes - price will now decrease. Maybe - price may ultimately increase or decrease. No - price…You are the manager of a local sporting goods store and recently purchased a shipment of 60 sets of skis and ski bindings at a total cost of $25,000 (your wholesale supplier would not let you purchase the skis and bindings separately, nor would it let you purchase fewer than 60 sets). The community in which your store is located consists of many different types of skiers, ranging from advanced to beginners. From experience, you know that different skiers value skis and bindings differently. However, you cannot profitably price discriminate because you cannot prevent resale. There are about 20 advanced skiers who value skis at $400 and ski bindings at $275; 20 intermediate skiers who value skis at $300 and ski bindings at $400; and 20 beginning skiers who value skis at $200 and ski bindings at $350. Determine your optimal pricing strategy.You are a pricing analyst for QuantCrunch Corporation, a company that sells a statistical software package. To date, you only have one client. A recent internal study reveals that this client’s inverse demand for your software is P=1500-5Q and that it would cost you $1,000 per unit to install and maintain software at this client’s site. What is the profit that results from two-part pricing? (Hint: set the per-unit price for each unit of the software installed and maintained equal to marginal cost; and charge a fixed “licensing fee” that extracts all consumer surplus from the client)
- Netflix customers in Australia could soon be facing steeper monthly charges. The popular streaming service on Monday confirmed that it recently tested higher subscription prices for new customers in Australia. The company—which has nearly 100 million global subscribers and expanded to Australia in 2015—has reportedly tested raising prices for new subscribers by as much as three Australian dollars (AU). Netflix’s test resulted in some Australian customers seeing price increases for the streaming service’s Basic plan (going from AU$8.99 to AU$9.99 per month), while Netflix’s Standard plan increased AU$2 to AU$13.99 and the Premium plan increased AU$3 to AU$17.99 per month, according to The Australian. Netflix confirmed the tests, but emphasized that it has not yet formally announced any permanent price increases. “We continuously test new things at Netflix and these tests typically vary in length of time,” the company said in a statement. “In this case, we are testing slightly…Your brother is considering two cell phone providers i.e. UFONE and MOBILINK. Q2. UFONE charges Rs.520 (super card) per month for the service regardless of the number of phone calls made. MOBILINK does not have a fixed service fee but instead charges Rs. 1 per minute for calls. Your brother's monthly demand for minutes of calling is given by the equation Qd = 150 - 50P, where P is the price of a minute a. With each service provider, what is the cost to your brother of an extra minute on the phone? b. In light of your answer to (a) part, how many minutes would your brother talk on the phone with each service provider? c. How much would he end up paying each provider every month?The GetUFit Company manufactures elliptical machines. The variable cost per unit to produce a model designed for in-home use is $500. The firm sold 1,311 of these machines at a price of $1,959. When the price was decreased to $1,613, sales increased to 2,256 units. Assuming all else equal and a linear demand function, calculate the profit maximizing price that GetUFit should charge for the machine. Currency (US) FREE
