Your local fast-food chain with two dozenstores uses the company's internal corporatemarketing department to produce signage,print ads, in-store displays, and so forth.When placing an order, store managers areassessed a chargeback (transfer price) of $80per order that reduces store profitability butincreases marketing department profitability.Lately, the store managers have beenordering more and more marketing services;the marketing department is swamped, and itcannot afford to hire more staff.Which of the following dollar figures is apossible value for the marginal cost per orderof the marketing department? In other words,which marginal cost per order for themarketing department would be consistentwith this situation? Check all that apply.$104.00$96.00$72.00$108.00

Marginal cost is the extra expense brought about in the creation of another unit of a decent or…

Answered: Your local fast-food chain with two…

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

You are the manager of firm Equis. Firm Zeta is your main competitor. You have the following information about your firm: price elasticity of demand is-1.25 income elasticity is 0.43, and cross-price elasticity between your firm and firm Zeta is 1.22. One of your subordinates approaches you with the proposal of temporarily lowering the price of your product in an effort to increase sales revenue. Which of the following statements is true? OA. Firm Equis sells a luxury good. OB. Firm Equis sells an inferior good. O C. If your goal is to increase sales revenue, you should not follow this recommendation D. If your goal is to increase sales revenue, you should follow this recommendation. OE. None of the above lection
You are the owner of a car dealership and you practice “no haggle” sales policy. Last year, you made a record profit of GHC 1.5 million. Your dealership competes in a market with price elasticity of demand of -1.3. Your marginal cost is GHC 12000. How much should you charge to maintain your record profit?
Widget Sales Jesaki Inc. is trying to enter the widget market. The research department established the following price-demand, cost, and revenue functions: p(x)=60-1.20x C(a) = 210 + 12x |R(x) = xp(x) = x(60 - 1.20x) Revenue function where x is in thousands of widgets and C(x) and R(x) are in thousands of dollars. The price p(z) is the price in dollars of one widget when the demand is a thousand widgets. All three functions have domain 1 ≤ ≤ 50. Use this information to answer questions 1-10 below. Price-demand function Cost function
Big Boss is a local pet shop, mainly selling cat food. It has a constant marginal cost of $24. She recently runs a promotional campaign using discount coupons. Suppose Big Boss estimates price elasticity of demand for coupon users and non-coupon users are –3.0 and –1.6 respectively. Calculate the prices Big Boss should charge on coupon users and non-coupon users respectively.
CareRight Medical Company has invented and received a patent for a new drug to treat a rare and fatal disease. It charges $5,000 for a year’s supply of the drug. Critics claim that this amount is excessive, as it does not cost that much to produce. They believe the company is taking advantage of sick people. CareRight responds that they are losing money on this drug. The critics are right: It does not cost CareRight $5,000 to produce a year’s supply for one person. However, CareRight’s statement is also correct in that they are losing money on the drug. How can both statements be true? Consider the different types of costs in your answer.
What general rules should a retailer know when planning initial markups? Explain why retailers generally express markups as a percentage of selling price.
Website Profit The latest demand equation for your gaming website, www.mudbeast.net, is given by q=-100x + 1500 where q is the number of users who log on per month and x is the log-on fee you charge. Your Internet provider bills you as follows. Site maintenance fee: $50 per month High-volume access fee: $0.50 per log-on Find the monthly cost as a function of the log-on fee x. C(x): = X Find the monthly profit as a function of x. P(x) = Determine the log-on fee you should charge (in dollars) to obtain the largest possible monthly profit. x = $ per log-on What is the largest possible monthly profit (in dollars)? $
You are managing a firm with market power, and you think the price elasticity of demand for your product is between 1.3 and 1.5. You estimate that your marginal cost is between $55 and $70. The price that you should set would range between $ and $. (Round your answers to two decimal places.) If you refine your estimate of the marginal cost to $80, the price you should set would now range between $ and $ (Round your answers to two decimal places.)
Parkleigh Pharmacy is an upscale department store in Rochester, NY, that sells personal accessories and home decorations. Kaufmann’s is a departmental store based in Pennsylvania and has several stores in Rochester, NY. Kaufmann carries a broad range of products and caters to middle-class customers. A salesperson at Parkleigh is paid a straight hourly wage (e.g., no sales commission) and 30% discount from purchasing any product from Parkleigh’s store. A salesperson at Kaufmann gets an hourly wage lower than Parkleigh’s hourly wage but gets 5% commission on sales. However, the product salesperson buys from Kaufmann without a discount. Explain why does Kaufmann pays sales commission, and Parkleigh doesn’t
(b) You are the CEO for a lightweight compasses manufacturer. The demand function for the lightweight compasses is given by p = 40−4q2where q is the number of lightweight compasses produced in millions. It costs the company $15 to make a lightweight compass. (i) Write an equation giving profit as a function of the number of lightweight compasses produced. (ii) At the moment the company produces 2 million lightweight compasses and makes a profit of $18,000,000, but you would like to reduce production. What smaller number of lightweight compasses could the company produce to yield the same profit?
A faculty member sells Gatorade at football games. He finds that if he raises his selling price by $1, he sells 6 less bottles each week. He turns over the operation to a Managerial Economics student for a week. The goal is to maximize revenue since the faculty member has a vast supply of Gatorade, and any unsold bottles can be sold in future weeks. The student takes over the operation for a week. She says she sold at the revenue-maximizing price of $4 per bottle. How many units sold? Show your work/thought process
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.

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS