Case F: Pepsi & Coke. The pie-chart given below shows the annual global market share of Pepsi and Coke for the last five years on average. Others, 4.2% Pepsi, 46.2% Coke, 49.6% Under what market structure do Pepsi and Coke operate? How can you explain the pricing behavior of Pepsi and Coke? Given the obvious market share of both Pepsi and Coke, on what grounds would you justify the multi-billion-dollar annual advertising spending by those two companies?
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- The pie-chart given below shows the annual global market share of Pepsi and Coke for the last five years on average.Under what market structure do Pepsi and Coke operate? How can you explain the pricing behavior of Pepsi and Coke? Given the obvious market share of both Pepsi and Coke, on what grounds would you justify the multi-billion-dollar annual advertising spending by those twoThe demand function for bicycles in Holland has been estimated to be Q = 2,000+ 15Y - 7.5P = where Y is income in thousands of euro, Q is the quantity demanded in units, and P is the price per unit. When P = 150 euro and Y what is: The price elasticity of demand? -1.02 O -7.5 -0.24 -0.50 The income elasticity of demand? 0.20 1.02 1.00 O 0.14 15,000 euro,When the U.S. government announced that a domestic mad cow was found in December 2003, analystsestimated that domestic supplies would increase inthe short run by 10.4% as many other countriesbarred U.S. beef. An estimate of the price elasticity of beef demand is (Henderson, 2003).Assuming that only the domestic supply curveshifted, how much would you expect the price tochange? (Hint: See the discussion of price flexibilityin the application “The Big Freeze.”)
- Can you help with parts c,d, and e please? The estimated daily demand for river corssings on a proposed new bridge is: Qd = 100,000 - 20,000P where Qd is the quantity demanded measured in number of daily crossings and P is the price(toll) per crossing in dollars. Engineers estimate that constructing the new bridge will result in a fixed cost of $1.2 billion or $120,000 per day over the life of the bridge. Once constructed, there are no marginal costs and variable costs associated with the bridge's use. Based upon the above information, answer the following questions: a. If a private company were to build the bridge, what would be the profit-maximizing number of daily crossings? b. What price per crossing(toll) would the profit-maximizing company establish? c. What would be the socially optimal number of daily crossings? d. What deadweight loss would exist given your answers to part (a) and (b)? e. Would a profit-maximizing company build the bridge?An analyst for FoodMax estimates that the demand for its "Brand X" potato chips is given by: Inoxd = 12.45 - 3.3 In Px+ 3.9Py+ 1.5 In Ax where Qx and Px are the respective quantity and price of a four-ounce bag of Brand X potato chips, Pyis the price of a six-ounce bag sold by its only competitor, and Axis FoodMax's level of advertising on brand X potato chips. Last year, FoodMax sold 5 million bags of Brand X chips and spent $0.35 million on advertising. Its plant lease is $2.5 million (this annual contract includes utilities) and its depreciation charge for capital equipment was $2.9 million; payments to employees (all of whom earn annual salaries) were $0.9 million. The only other costs associated with manufacturing and distributing Brand X chips are the costs of raw potatoes, peanut oll, and bags; last year FoodMax spent $2.6 million on these items, which were purchased in competitive input markets. Based on this information, what is the profit-maximizing price for a bag of Brand X…A1). The price, p, that a bookstore charges for a special gift edition of a popular trilogy is related to the demand, q, by the equation 100pq + q? = 5,000,000. Suppose the price is currently set at $40. (a). At what rate is the demand currently changing with respect to this price? (Include units) (b). At what rate is the revenue currently changing with respect to this price? (Hint: use the chain rule). (Include units). (c). Suppose the demand is currently increasing at a rate of 50 copies per month. How fast is the price currently changing per month? (again, assume the price is currently $40).Include units.
- QUESTION TWO A. Empirical estimates suggest the following price elasticity of demand: 0.6 for Coca Cola; 4.0 for foreign vacation travel; and 0.2 for food. Úsing the determinants of price elasticity of demand, explain why each of these commodities would have these coefficients elasticity. B. Lisa Gee Ghana Ltd., is the main sales agent of Infinix phones in Ghana. The economist of this enterprise has estimated the demand function for the firm's products per week to be of the form: Q = 445 - 2.5P - 81 + 2.5Pr where; Q is the quantity demanded of Infinix phones, P. is its own-price, Pr is the price of a related good (Tecno Phones) and I is income. Giventhat Pi = 10, Pr = 5 and I = 40, use the above information to: i. Determine the quantity demanded of Infinix phones per week and compute the own-price elasticity of demand for Infinix phones and interpret your results. ii. Based on your answer in (i), what pricing policy would you recommend for the firm in order to maximize its total…PRICE (Dollars per unit) 350+ 225 175) 50 0 Region Between Y and Z Between W and X Between X and Y Z True False X 28 36 QUANTITY (Units) For each of the regions listed in the following table, use the midpoint method to identify if the demand for this good is elastic, (approximately) unit elastic, or inelastic. I 56 W Demand True or False: The slope of the demand curve is equal to the value of the price elasticity of demand. Elastic Inelastic Unit ElasticPlease no written by hand solution Instead of assuming a linear demand curve, suppose we assume that demand is char- acterized by the following demand function qD = 13.572P −1.5 (a) Suppose the current price is $5. What is the price elasticity of demand at this price? (b) Over what range of prices is demand elastic? Inelastic? Unit elastic?
- Provide step wise solution.... I ll upvote Suppose that the short-run world demand and supply elasticities for crude oil are −0.076 and 0.088 , respectively. The current price per barrel is $ 30 and the short-run equilibrium quantity is 23.84 billion barrels per year. Derive the linear demand and supply equations.Draw the graph. If the monopoly is a price-discriminating monopoly charging some customers P1= $950 and other customers P2=$400, then: At the price P1= $950, the monopoly will sell a quantity Q1 = ______ At the price P2= $400, the monopoly will sell a quantity Q2 = ______. (Obs: calculation required here!) Total quantity sold at both prices is Q3 = Q1 + Q2 = ___________. The profit earned from selling the quantity Q1 at P1 is Profit1 = ____________________(identify the area on the graph and calculate it). The profit earned from selling the quantity Q2 at P2 is Profit2= ____________________(identify the area on the graph and calculate it). The total profit earned by the price discriminating monopolist is Profit = Profit1 + Profit2 = _______.The demand function for SkanDisc 2GB thumb drives is given by p- 4(x + 3) e"/a where p is the wholesale unit price in dollars and x is the quantity demanded each week, measured in units of a thousand. Compute the price, p, when x 6. Do not round your answer. Price, p- 36e dollars Use implicit differentiation to compute the rate of change of demand with respect to price, p, when x- 6. Do not round your answer. Rate of change of demand, x' x thousands of units per dollar Compute the elasticity of demand when x - 6. Do not round your answer. Elasticity of Demand-