Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Textbook Question
Chapter 5, Problem 6E
The economic analysis division of Mapco Enterprises has estimated the
where
In 2010, 15,000 new homes are expected to be completed in the primary market area. Mapco plans to charge $50 for its trimmer. The Surefire trimmer is expected to sell for $55.
- What sales are
forecasted for 2010 under these conditions? - If its competitor cuts the price of the Surefire trimmer to $50, what effect will this have on Mapco’s sales?
- What effect would a 30 percent reduction in the number of new homes completed have on Mapco’s sales (ignore the impact of the price cut of the Surefire trimmer)?
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The economic analysis division of Mapco Enterprises has estimated the demand function for its line of weed trimmers as QD = 18,000 + 0.4N − 350PM + 90Ps whereN = number of new homes completed in the primary market area PM = price of the Mapco trimmer PS = price of its competitor’s Surefire trimmer In 2010, 15,000 new homes are expected to be completed in the primary market area. Mapco plans to charge $50 for its trimmer. The Surefire trimmer is expected to sell for $55. a. What sales are forecasted for 2010 under these conditions? b. If its competitor cuts the price of the Surefire trimmer to $50, what effect will this have on Mapco’s sales?c. What effect would a 30 percent reduction in the number of new homes completed have on Mapco’s sales (ignore the impact of the price cut of the Surefire trimmer)?
A large company in the communication and publishing industry has quantified the relationship between the price of one of its products and the demand for this product as
Price=160−0.02×Demand
for an annual printing of this particular product. The fixed costs per year (i.e., per
printing)=$47,000
and the variable cost per
unit=$40.
What is the maximum profit that can be achieved? What is the unit price at this point of optimal demand? Demand is not expected to be more than
4,000
units per year.
The maximum profit that can be achieved is
$?
(Round to the nearest dollar.)
The unit price at the point of optimal demand is
$?
per unit.
A large company in the communication and publishing industry has quantified the relationship between the price of one
of its products and the demand for this product as Price = 160 -0.02 × Demand for an annual printing of this particular
product. The fixed costs per year (i.e., per printing) = $51,000 and the variable cost per unit = $35. What is the
maximum profit that can be achieved? What is the unit price at this point of optimal demand? Demand is not expected
to be more than 4,000 units per year.
The maximum profit that can be achieved is $144,313. (Round to the nearest dollar.)
The unit price at the point of optimal demand is $ per unit. (Round to the nearest cent.)
Chapter 5 Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Ch. 5 - The forecasting staff for the Prizer Corporation...Ch. 5 - Prob. 2ECh. 5 - Metropolitan Hospital has estimated its average...Ch. 5 - Prob. 4ECh. 5 - A firm experienced the demand shown in the...Ch. 5 - The economic analysis division of Mapco...Ch. 5 - The Questor Corporation has experienced the...Ch. 5 - Bell Greenhouses has estimated its monthly demand...Ch. 5 - Savings-Mart (a chain of discount department...Ch. 5 - Prob. 1.1CE
Ch. 5 - Plot the logarithm of arrivals for each...Ch. 5 - Logarithms are especially useful for comparing...Ch. 5 - Prob. 1.4CECh. 5 - In attempting to formulate a model of the...Ch. 5 - Estimate the double-log (log linear) time trend...Ch. 5 - Prob. 2.1CECh. 5 - Prob. 3.1CECh. 5 - Prob. 3.2CECh. 5 - Prob. 3.3CE
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