3 Short Answer 2 Consider the market equilibrium model on the regression practice prob-lems where prices and quantities are determined jointly by the intersection of the supply anddemand curves. We showed that, in this case, OLS of Q on P does not recover the supplynor demand elasticity. A solution to this endogeneity problem is an instrument.One popular instrument for a firm's price setting decision is the characteristics of productsproduced by rival firms. Why do you think such an instrument would be relevant? Do youthink such an instrument would satisfy the exclusion restriction? Why?

The determination of prices in different markets is usually characterized by two opposing…

Answered: Short Answer 2 Consider the market…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter10: Introduction To Simulation Modeling

Section: Chapter Questions

Problem 36P: Dilberts Department Store is trying to determine how many Hanson T-shirts to order. Currently the...

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Dilberts Department Store is trying to determine how many Hanson T-shirts to order. Currently the shirts are sold for 21, but at later dates the shirts will be offered at a 10% discount, then a 20% discount, then a 40% discount, then a 50% discount, and finally a 60% discount. Demand at the full price of 21 is believed to be normally distributed with mean 1800 and standard deviation 360. Demand at various discounts is assumed to be a multiple of full-price demand. These multiples, for discounts of 10%, 20%, 40%, 50%, and 60% are, respectively, 0.4, 0.7, 1.1, 2, and 50. For example, if full-price demand is 2500, then at a 10% discount customers would be willing to buy 1000 T-shirts. The unit cost of purchasing T-shirts depends on the number of T-shirts ordered, as shown in the file P10_36.xlsx. Use simulation to determine how many T-shirts the company should order. Model the problem so that the company first orders some quantity of T-shirts, then discounts deeper and deeper, as necessary, to sell all of the shirts.
ou have been pricing Samsung-Galaxy SmartWatch in several stores. Three stores have the identical price of $400. Each store charges 18 percent APR, has a 30-day grace period, and sends out bills on the first of the month. On further investigation, you find that store A calculates the finance charge by using the average daily balance method, store B uses the adjusted balance method, and store C using the previous balance method. Assume you purchased the SmartWatch on May 5 and made a $100 payment on June 15. What will the finance charge for June be if you made your purchase from store A? From store B? From store C?
Sandy James thinks that housing prices have stabilized in the past few months. To convince her boss, she intends to compare current prices with last year's prices. She collects 12 housing prices from the want ads: 125,900 253,000 207,500 146,950 121.450 135,450 175,000 200,000 210,950 166,700 185,000 191,950 She then calculates the mean and standard deviation of the prices she has found. What are these two summary values?
Stocks with high market betas have higher expected returns than stocks with low market betas. This evidence is inconsistent withI. The weak form efficient market hypothesisII. The semi-strong form efficient market hypothesisIII. The strong form efficient market hypothesis a) I, II, and III b) I and II c) I d) None of I, II, and III
You have been pricing Samsung-Galaxy SmartWatch in several stores. Three stores have the identical price of $400. Each store charges 18 percent APR, has a 30-day grace period, and sends out bills on the first of the month. On further investigation, you find that store A calculates the finance charge by using the average daily balance method, store B uses the adjusted balance method, and store C using the previous balance method. Assume you purchased the SmartWatch on May 5 and made a $100 payment on June 15. What will the finance charge for June be if you made your purchase from store A?
The article "New Product Blockbusters: The Magic and Science of Prediction Markets", discusses the importance of new product development in firms and the challenges associated with predicting the success of new products. The authors propose a novel approach to screening new product ideas and predicting their demand using prediction markets. According to the authors, research suggests new product introductions increase a firm's long-term financial performance and market value. The article discusses the challenges associated with predicting the success of new products. Only one out of every five new product launches are successful, and firms often fail to capitalize on the success of new product blockbusters because of poor demand forecasts. There are two common approaches to predicting new product demand: surveying target customers about their purchase intentions and pooling experts' opinions. However, there are limitations of these approaches and propose a novel approach using…
You have been pricing Samsung-Galaxy SmartWatch in several stores. Three stores have the identical price of $600. Each store charges 12 percent APR, has a 30-day grace period, and sends out bills on the first of the month. On further investigation, you find that store A calculates the finance charge by using the average daily balance method, store B uses the adjusted balance method, and store C using the previous balance method. Assume you purchased the SmartWatch on May 5 and made a $100 payment on June 15. What will the finance charge for June be if you made your purchase from store A? From store B? From store C?
Lefola Limited is the only manufacturer of product G_Easy in the Popa Land. It has provided documented levels of demand at certain selling prices for product G_Easy which are as follows:Price per unit 7 0006 000Demand Units 01Total costs 3 0005 000875 000 2 4 000 3 3 000 4 2 000 5 1 000 68 000 12 000 17 000 23 000 30 000Required:MGA40AT/POF117V – 2020 Instructional Teaching manual packUsing a tabular approach, calculate the marginal revenues and marginal costs for product G_Easy at the different levels of demand, and so determine the selling price at which Lefola Limited’s profits are maximized.
12 The fictitious Haskins & Collins Ice Cream Store needsan accurate estimate of demand. The owner of the store believes that the demand for ice cream has a quarterly seasonal pattern. To analyze the pattern, the ownergathered the following quarterly ice cream sales data ingallons for the past 4 years:Quarter Year 1 2 3 4January - March 370 380 470 530April - June 550 500 620 700July - September 770 820 980…
A business conducted a linear regression to estimate its demand function and obtain the following demand function Q = 200 - 1.5P + 0.55A - 2.8Py + 0.05Inc, where P is price and A is advertising. When P = $21. A = $30 and Quantity = 160, find the profit-maximizing advertising-to-sales ratio (hint: first find the price and advertising elasticities). Type as either a decimal out two spaces, like 0.10 OR as a percentage like 10%. %3! %3! Question 17 During recessions, people's reservation price (aka reserve price) searching. which results in O drops; less O rises; more drops; more O rises; less
Use the below formula to calculate the CLV for the following: A manager of a cable company wants to determine if it is strategic to acquire the Brett family, by estimating their household-level CLV. The manager estimates that it will cost the company $80 (A) to get the Bretts’ to switch, and the Bretts’ will generate $150 profit each year (M), with a $30 annual marketing cost to retain them (C). The estimated retention rate (r) is 65%, and the current discount rate is 5%.(d) i) CLV= ii) Based on your calculation, are the Brett’s profitable to the cable company?
b. The following table shows the number of televisions sold over the last ten years at alocal electronic store. YEAR TV SALES 1 1502 3003 4804 6005 6306 6407 7008 8259 90010 980 i. Using trend projection, develop a formula to predict sales for years 11 and 12. Youhave to show all working. You will need to develop a table to calculate the slope andthe intercept.

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