The marketing research department of a large manufacturing company has determined that the demand equations for two major items it produces are given by p 2,000-5x+8y and q= 4,000 + 9x-7y where p is the price of item A, q is the price of item B, x is the monthly demand for item A, and y is the monthly demand for item B. Find the total monthly revenue from items A and B when x = 15 and y = 5. A. $29,415 B. $49,975 C. $20,565 D. $50,195
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- 3) The marketing research department of a large manufacturing company has determined that the demand equations for two major items it produces are given by p = 2,000 -5x + 8y andq = 4,000 +9x-7y where p is the price of item A, q is the price of item B, x is the monthly demand for item A, and y is the monthly demand for item B. Find the total monthly revenue from items A and B whenx = 15 and y =5.Suppose a firm produces two products, X and Y. The firm earns revenues from X equal to $70,000 and revenues from Y equal to $60,000. The own price elasticity of demand for Xis-1.5 and the cross-price elasticity of demand between X and Y is-0.80, If the firm decreases the price of product X by 1%, the change in total revenues will be $Suppose you are the manager of a restaurant that serves an average of 400 meals per day at an average price per meal of $20. On the basis of a survey, you have determined that reducing the price of an average meal to $18 would increase the quantity demanded to 450 per day. Compute the price elasticity of demand between these two points. Would you expect total revenues to rise or fall? Explain. Suppose you have reduced the average price of a meal to $18 and are considering a further reduction to $16. Another survey shows that the quantity demanded of meals will increase from 450 to 500 per day. Compute the price elasticity of demand between these two points. Would you expect total revenue to rise or fall as a result of this second price reduction? Explain. Compute total revenue at the three meal prices. Do these totals confirm your answers in (b) and (d) above?
- You are the manager of a firm that receive revenue of Rs.30,000 per year from product X and Rs. 70,000 per year from product Y. The own price elasticity of demand for product X is -2.5 and the cross price elasticity of demand between product Y and X is 1.1. How much will you firm’s total revenue (revenues from both products) change if you increase the price of good X by 1 present?Salina advertises her production of home workout supplies. Initially an exercise floor pad is sold for $25 per pad. At the price of $25, she sells 50 workout floor pads. Suppose Salina decides to increase the price of this product to $35. Sales fall to 40 pads. Assume the price elasticity of demand is 0.60 Based on the price elasticity of demand, without calculating the actual change in total revenue, what do you expect to happen to total revenue? Calculate total revenue at a price of $25. Calculate total revenue at a price of $35. Did total revenue increase or decrease?Suppose a firm expects sales of about $45 million for the coming year. The firm’s marketing department has estimated that a 1 percent increase in advertising would increase sales by about 0.7 percent, and that a 1 percent increase in the firm’s prices would reduce the quantity sold by about 2.8 percent. What is the firm’s price elasticity of demand? Its advertising elasticity of demand? What is the optimal amount for the firm to spend on advertising in the coming year?
- What is the calculation for E= Question is : Adam makes specialized garden figurines in a small shop on his property , and his monthly total sales revenue is $630.00 when he charges $18.00 for each figurine . one month , he tried lowering his price to $17.00 , and his total revenue that month was $646.00 . On the basis of these data , what is the proce elasticity of demand for adams product ? Please show what formula you use and steps to calculate so i can know how thank you.Your firm’s research department has estimated the income elasticity of demand for nonfed ground beef to be −1.94. You have just read in The Wall Street Journal that due to an upturn in the economy, consumer incomes are expected to rise by 10 percent over the next three years. As a manager of a meat-processing plant, how will this forecast affect your purchases of nonfed cattle?ONLY ANSWER QUESTION #2 1. Online the timing and tailoring of prices to specific models of products is the key to successful pricing in online markets. And “Thanks to the ready availability of data in online markets, a pricing manager can easily approximate the elasticity of demands for the different products it sells online.”Assuming a 10 percent decrease in price increases sales by 28 percent, calculate the price elasticity of demand? If the wholesale price of the online product is $50 and sells at a price comparison site that charges $.50 per click and boasts a conversion rate of 5 percent (an average of 20 clicks are needed to generate a sale). What price should you charge for the product? What is the optimal markup on cost? 2. The authors assert that price sensitivity is affected by (1) product life cycles, and (2) numbers of competitors. In fact, “when the number of competing sellers doubles, a firm’s elasticity of demand is expected to double (and you should be able to verify…
- Suppose that the Blinn College Deli is currently selling 500 chef salads per day when the price is $5. Suppose that the own-price elasticity of demand for chef salads is -0.8. As the Deli manager you decide to lower the price by $0.50. Which of the following is most likely to happen? Chef salad sales will fall by approximately 8% and total revenue will be lower. Chef salad sales will rise by approximately 8% and total revenue will be higher. Chef salad sales will fall by approximately 8% and total revenue will be higher. Chef salad sales will rise by approximately 8% and total revenue will be lower.An analyst for FoodMax estimates that the demand for its “Brand X" potato chips is given by: InQx = 10.34 – 3.2 In Px+ 4Py+ 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 Ax is FoodMax's level of advertising on brand X potato chips. Last year, FoodMax sold 5 million bags of Brand X chips and spent $0.25 million on advertising. Its plant lease is $2.5 million (this annual contract includes utilities) and its depreciation charge for capital equipment was $2.5 million; payments to employees (all of whom earn annual salaries) were $0.5 million. The only other costs associated with manufacturing and distributing Brand X chips are the costs of raw potatoes, peanut oil, and bags; last year FoodMax spent $2.5 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…A local pizzeria sells 500 large pepperoni pizzas per week at a price of $20 each. Suppose the owner of the pizzeria tells you that the price elasticity of demand for his pizza is -3, and he asks you for advice. He wants to know two things. First, how many pizzas will he sell if he cuts his price by 10%? Second, how will his revenue be affected? If he cuts his price by 10%, his sales will increase to______pizzas, and his total revenue will increase to $ _____.