Explain the importance to protect the producers from the non – paying customers.

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Answer 1

Question

Chapter 5, Problem 1CQ

To determine

Explain the importance to protect the producers from the non – paying customers.

Expert Solution & Answer

Explanation of Solution

In the market, if the payment is not demanded for the goods and services, then the potential customers have large incentive to attempt a free ride in an economy. If the number of non – paying customers increase, then the sales revenue of sellers will decrease and be eliminated. It will lead to a decrease in the sellers’ incentive to supply the goods in the market.

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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

Answer 2

Question

Chapter 5, Problem 1CQ

To determine

Explain the importance to protect the producers from the non – paying customers.

Expert Solution & Answer

Explanation of Solution

In the market, if the payment is not demanded for the goods and services, then the potential customers have large incentive to attempt a free ride in an economy. If the number of non – paying customers increase, then the sales revenue of sellers will decrease and be eliminated. It will lead to a decrease in the sellers’ incentive to supply the goods in the market.

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Answer 3

Question

Chapter 5, Problem 1CQ

To determine

Explain the importance to protect the producers from the non – paying customers.

Expert Solution & Answer

Explanation of Solution

In the market, if the payment is not demanded for the goods and services, then the potential customers have large incentive to attempt a free ride in an economy. If the number of non – paying customers increase, then the sales revenue of sellers will decrease and be eliminated. It will lead to a decrease in the sellers’ incentive to supply the goods in the market.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 5, Problem 1CQ

To determine

Explain the importance to protect the producers from the non – paying customers.

Expert Solution & Answer

Explanation of Solution

In the market, if the payment is not demanded for the goods and services, then the potential customers have large incentive to attempt a free ride in an economy. If the number of non – paying customers increase, then the sales revenue of sellers will decrease and be eliminated. It will lead to a decrease in the sellers’ incentive to supply the goods in the market.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 5, Problem 1CQ

To determine

Explain the importance to protect the producers from the non – paying customers.

Expert Solution & Answer

Explanation of Solution

In the market, if the payment is not demanded for the goods and services, then the potential customers have large incentive to attempt a free ride in an economy. If the number of non – paying customers increase, then the sales revenue of sellers will decrease and be eliminated. It will lead to a decrease in the sellers’ incentive to supply the goods in the market.

Answer 6

Chapter 5, Problem 1CQ

To determine

Explain the importance to protect the producers from the non – paying customers.

Expert Solution & Answer

Explanation of Solution

In the market, if the payment is not demanded for the goods and services, then the potential customers have large incentive to attempt a free ride in an economy. If the number of non – paying customers increase, then the sales revenue of sellers will decrease and be eliminated. It will lead to a decrease in the sellers’ incentive to supply the goods in the market.

Answer 7

Chapter 5, Problem 1CQ

To determine

Explain the importance to protect the producers from the non – paying customers.

Answer 8

Expert Solution & Answer

Explanation of Solution

In the market, if the payment is not demanded for the goods and services, then the potential customers have large incentive to attempt a free ride in an economy. If the number of non – paying customers increase, then the sales revenue of sellers will decrease and be eliminated. It will lead to a decrease in the sellers’ incentive to supply the goods in the market.