TRUE of FALSE Cost- plus pricing is circular for the manufacturing industry in that demand must be estimated to determine the fixed manufacturing costs per unit before the cost is marked up to obtain a selling price, which has a major impact on the quantity demand.

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.

1. A company has estimated that its total cost (TC) function is: TC = 12,000 + 60Q Where Q refers to quantity. The marketing department of this company is unable to estimate the demand function for the company but believes the price elasticity for the company's products is (-)4. Given this information, calculate the profit maximising price

Suppose Ring Dental is the single supplier at HRM region provide the dental service and has a market demand curve Q = 40 – P; A total cost curve given by the formula: T C = 80 - 20Q + 2Q2 Find the profit-maximizing quantity, price, and profit. Now, suppose Halifax Dental wishes to separate the market and target to two different groups of customers young and old customers, the average cost = marginal cost = 10 for both markets Young customers with elasticity = -5 and DA = 12000 - 65P Old customers with elasticity = -7 and DB = 12000 - 55P What is the profit if Halifax Dental sets the equal price for both markets? (use the average elasticity for equal price) What is the profit if Halifax Dental charges different prices for each market?

Many companies start with cost to determine price since revenue must cover cost for the firm to make a profit. True False

A typical firms supply curve is perfectly inelastic when the price is below or above the break-even price. It is infinitely elastic when the price equals the break-even price. True False

If the price is given as 20 per unit and the given quantity is $150 billion  Find the Total revenue

The publisher of a magazine gives his staff the following information: Current price Current sales Current revenue Current total costs $2.00 per issue 150,000 copies per month $300,000 per month $450,000 per month He tells the staff, "Our costs are currently $150,000 more than our revenues each month. I propose to eliminate this problem by raising the price of the magazine to $3.00 per issue. This will result in our revenue being exactly equal to our cost." Refer to the table above, which of the following statements is correct? The publisher's analysis is correct only if the demand is elastic. The publisher's analysis is correct only if the demand is perfectly elastic. The publisher's analysis is correct only if the demand is unit elastic. The publisher's analysis is correct only if the demand is perfectly inelastic.

The Lead Zeppelin Company produces powered and steerable lighter-than-air craft. The company’s airships are specially lined and are therefore safer than normal dirigibles. The table below shows the weekly production of dirigibles, along with the associated Average Cost and Total Revenue figures (the Average Cost and Total Revenue figures are actually in thousands of dollars, so the $15 represents $15,000, but we have left off the zeros to save space).   Quantity Average Cost Total Cost Total Revenue 0  -- 0 $0 1 $15 15 $10 2 $9 18 $20 3 $8 24 $30 4 $8.50 34 $40 5 $9 45 $50 6 $10 60 $60 7 $12 84 $70   The Lead Zeppelin Company has decided that it will produce at least 1 dirigible. Now the question becomes, how many more dirigibles should it produce to make as much profit as possible?   Use the profit-maximizing rule to explain how many dirigibles the Lead Zeppelin Company should produce to…

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