(a) The reason firm's use non-linear pricing is to increase the firm's sales increase the firm's revenue change the consumer's preferences o reduce the firm's costs
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- Explain the type of pricing strategy that you as the manager of a company would implementfor Good X and Good Y with the following price elasticity of demand co efficients. Usediagrams to motivate your answer.a). Good X: 2.3 b). Good Y: 0.6Hans is a butcher in Washington. The following contains data on prices and weekly sales at his shop Good Beef Chicken Price 9.00/lbs $4.00/lbs Quantity 400 lbs 300 lbs ShS He estimates that the own price elasticity for beef is 2 and for chicken is .75. He also estimates that the cross price elasticity for chicken is .60. His current revenue from the sale of these two goods is making a total of $4800/week. In the spirit of the return to good times and outdoor grilling, he has decided to lower the price of beef for the summer, from $9.00 to $8.55. Overall, Hans can expect to take in dollars in revenue, given the information in this problem? (Revenue = Price x sales). Record your answer without a dollar sign and without a comma. Helpful Hint: In this problem, we are not changing the price of chicken.16. Revenue with Substitutable Products. The Camera Shop sells two popular models of digital single lens reflex (DSLR) cameras. The sales of these products are not inde- pendent; if the price of one increases, the sales of the other increases. In economics. these two camera models are called substitutable products. The store wishes to estab- lish a pricing policy to maximize revenue from these products. A study of price and sales data shows the following relationships between the quantity sold (N) and price (P) of each model: NA 195 0.6PA + 0.25PB N = 301+0.08PA-0.5PB a. Construct a model for the total revenue and implement it on a spreadsheet. b. Develop a two-way data table to estimate the optimal prices for each product in order to maximize the total revenue. Vary each price from $250 to $500 in incre- ments of $10.
- 1) Walkers’ Shoes reports the following demand schedule for its black brogues.Price 1600 800 400 200 100 50 25 12.5Quantity demanded 2 4 8 16 32 64 128 256a) For an increase in price from 50 to 100, calculate:i) The proportional change in price.ii) The proportional change in quantity demanded.iii) The price elasticity of demand for Walkers’ black brogues.b) Considering the demand schedule in the table, what do you conclude about the value of the price elasticity of demand for Walkers’ black brogues at every level of output? How would you classify the demand for such a good?c) What is the effect on Walkers Shoes’ total revenue of doubling the quantity of shoes which it supplies? What is the value of its marginal revenue? How does your answer relate to the value of the price elasticity of demand?d) The income elasticity of demand for Walkers’ Shoes is estimated to be 1.8. By how what percentage do you expect demand to increase if its customers’ incomes increase from 31,500 to 38,500?Joe's Pig Palace sells barbecue plates for $4.50 each, and serves an average of 525 customers per week. During a recent promotion, Joe cut his price to $3.50 and observed an increase in sales to 600 plates per week. a. Calculate Joe's arc price elasticity of demand. b. Joe is considering permanently lowering his price to $4.00 to increase revenue. How many plates should Joe expect to sell at the new price? Does the move make sense in the light of Joe's desire to increase revenue?please show answer for graph and multiple choice Draw a curve that shows the relationship between quantity and total revenue when the demand curve for umbrellas is linear. Label it TR. Draw a point on the curve at which demand is elastic. Label it Elastic. Draw a point on the curve at which demand is inelastic. Label it Inelastic. Draw a point on the curve at which demand is unit elastic. Label it Unit Elastic. IT If demand is elastic, what is the effect of a 1 percent price cut on the quantity sold? If demand is elastic, a 1 percent price cut sold by OA. increases; more than 1 percent the quantity *** 50 O A. increases; more than 1 percent B. decreases; 1 percent C. decreases; more than 1 percent D. increases; less than 1 percent 40- 30- 20 10- 0+ If demand is elastic, a 1 percent price cut sold by 10 Quantity (millions of umbrellas per year) >>> Draw only the objects specified in the question. Total revenue (millions of dollars per year) 0 12 the quantity
- 6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in Denver. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. 2 Total Revenue PRICE (Dollars per bike) 88NR S 89 88 89 O 300 275 18 27 35 45 54 53 72 QUANTITY (Bikes) 91 Demand 90 99 108You have just opened a new grocery store. Every item you carry is generic (generic beer, genericbread, generic chicken, etc.). You recently read an article in the Wall Street Journal reporting thatthe price of recreation is expected to increase by 15 percent and cross price elasticity is 0.15. will this affect your store’s salesof generic food products?If demand is flat, then Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b C d an increase in price will reduce total revenue, indicating little pricing power. an increase in price will increase total revenue, indicating little pricing power. a decrease in price will reduce total revenue, indicating a lot of pricing power. a decrease in price will have no effect on total revenue, indicating no pricing power. Your answer
- Walkers’ Shoes reports the following demand schedule for its black brogues. Price 1600 800 400 200 100 50 25 12.5 Quantity Demand 2 4 8 16 32 64 128 256 For an increase in price from 50 to 100, calculate: i) The proportional change in price. ii) The proportional change in quantity demanded. iii) The price elasticity of demand for Walkers’ black brogues.suppose a pharmaceutical company considers increasing the price of insulin tm $125 per vial to $300 per vial. whenthe price was $125, the company sold 100, 000 vials per day. the company knows its price elasticity is .25. calculate thepercentage change in quantity demanded that would result in a price elasticity of .25. show your workCreative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned, however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(1) the concept of elasticity of demand, (2) why raisingprices without understanding the elasticity would bea bad move, (3) your recommendations for measurement, and (4) the potential impact on profits for elasticand inelastic demand
