Assume that a firm faces two markets where the demand elasticity in Market A is -5 and in Market B is -3. In addition, the marginal cost (m) is the same in both markets and is equal to $100. Determine the profit-maximizing prices. The price in Market A is $ (Round your response to two decimal places.)
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- Practice #6 Francine is a a dental floss tycoon living in Montana. She faces the following demand curve for her product: Price ( in $/unit) Quantity demanded 2.50 1000 2.20 2000 1.90 3000 1.60 4000 1.30 5000 1.00 6000 .70 7000 .40 8000 Francine has been told by her brother, who is currently taking a marketing class, that if she lowers her price by one increment(for example; changing price from .70 to .40, she will capture market share and increase total revenue. All of her advisors within the company have assured Francine that her brother's advice may be correct, BUT the above demand curve will not change. Assume that Francine knows the above demand curve will not change and is also considering her brother's advice. The prices can only change in…A company produces a special new type of TV. The company has fixed costs of $451,000, and it costs $1000 to produce each TV. The company projects that if it charges a price of $2600 for the TV, it will be able to sell 800 TVs. If the company wants to sell 850 TVs, however, it must lower the price to $2300. Assume a linear demand. If the company sets the price at $3800, how much profit can it earn? It can expect to earn/lose $enter your response here. (Round answer to nearest dollar.)Your firm’s research department has estimated the income elasticity of demand for nonfed ground beef to be −1.94. You have just read in The Wall Street Journal that due to an upturn in the economy, consumer incomes are expected to rise by 10 percent over the next three years. As a manager of a meat-processing plant, how will this forecast affect your purchases of nonfed cattle?
- Your firm’s research department has estimated the income elasticity of demand for non fed ground beef to be -1.94. You have just read in the Wall Street Journal that due to an upturn in the economy, consumer incomes are expected to rise by 10 percent over the next three years. As a manager of a meat-processing plant, how will this forecast affect your purchases of non fed cattle?Assume you are managing a food processing plant in Ethiopia. The demand function for one of your product is given as Qd=50-2p. a) Find the point price elasticity if price is 15 ETB? Is it elastic or inelastic? b) How do you interpret the elasticity result? c) In order to get more revenue what will be your recommendation. Is it to increase price or decrease price? Why?The demand function for product is p = -4q+400 and the average cost for producing q units 500 is c = 37q + 40 + where p= price, and q= quantity demand. 2 9 1. 2. 3. 4. Compute the point elasticity of demand and find the intervals where the demand is inelastic, elastic, and the price for which the demand is unit elastic. Find the quantity that maximizes the total revenue and the corresponding price. Interpret your result. Find the quantity that minimizes the average cost function and the corresponding price. Interpret your results. What are the quantity and the price that maximize the profit? What is the maximum profit? Interpret your result.
- LawnTech sells its laser hedge trimmer at a price of $275, and estimates price elasticity of demand at -3.9 at this price. LawnTech is thinking about raising its price by +4.0%. By what percent will Quantity sold change, given this change in price? Report your answer as a percent. Report 25.5%, for example, as "25.5". Remember to report the sign of the change. Rounding: tenth of a percent. Your Answer: AnswerCikli is the manager of a firm that receives a revenue of RM3000 per month from product X and RM7000 per month from product Y. The price elasticity of demand for product X is -2.5 when original quantity (Q) for X and Y are 150 and 175 units, respectively and the cross price elasticity of demand between product X and Y is 1.1. If Cikli increases the price of good X by 1%. How much will Cikli’s total revenue change for product X? How much is Cikli’s new total revenue for both of the products? Plot a graph for product X and another for product Y, showing the before and after change in price. Give an appropriate example for each product.Cikli is the manager of a firm that receives a revenue of RM3000 per month from product X and RM7000 per month from product Y. The price elasticity of demand for product X is -2.5 when original quantity (Q) for X and Y are 150 and 175 units, respectively and the cross price elasticity of demand between product X and Y is 1.1. If Cikli increases the price of good X by 1%. How much is Cikli’s new total revenue for both of the products?
- 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 lectionCikli is the manager of a firm that receives a revenue of RM3000 per month from product X and RM7000 per month from product Y. The price elasticity of demand for product X is -2.5 when original quantity (Q) for X and Y are 150 and 175 units, respectively and the cross price elasticity of demand between product X and Y is 1.1. If Cikli increases the price of good X by 1%. How much will Cikli’s total revenue change for product X?Cikli is the manager of a firm that receives a revenue of RM3000 per month from product X and RM7000 per month from product Y. The price elasticity of demand for product X is -2.5 when original quantity (Q) for X and Y are 150 and 175 units, respectively and the cross price elasticity of demand between product X and Y is 1.1. If Cikli increases the price of good X by 1%. a. How much will Cikli's total revenue change for product X? b. How much is Cikli's new total revenue for both of the products? c. Plot a graph for product X and another for product Y, showing the before and after change in price. d. Give an appropriate example for each product. 2. Zulaikha and Ker Xin went to a shop to buy rice. Zulaikha wanted to buy 10kg of rice and Ker Xin wanted to buy RM20 worth of rice. Find the price elasticity of demand for each of them. 3. Nadzif always spends one-fifth of his income on food. Calculate his income elasticity of demand (use the midpoint formula).