Eco 550

Topics: Hybrid electric vehicle, General Motors, Toyota Prius Pages: 2 (302 words) Published: January 18, 2013
QD = fðP, PS, PC, Y, A, AC, N, CP, PE, TA, T=S …Þ [2.1]

where QD = quantity demanded of (e.g., Toyota Prius or Chevy Volt) P = price of the good or service (the auto)
PS = price of substitute goods or services (e.g., the popular gasoline-powered Honda Accord or Chevy Malibu)
PC = price of complementary goods or services (replacement batteries) Y = income of consumers
A = advertising and promotion expenditures by Toyota, Honda, and General Motors (GM)
AC = competitors’ advertising and promotion expenditures
N = size of the potential target market (demographic factors) CP = consumer tastes and preferences for a “greener” form of transportation PE = expected future price appreciation or depreciation of hybrid autos TA = purchase adjustment time period

T/S = taxes or subsidies on hybrid autos

QS = fðP, PI , PUI, T, EE, F, RC, PE, T=S …Þ (Equation 2.2) where Qs = quantity supplied (e.g., of domestic autos)
P = price of the autos
PI = price of inputs (e.g., sheet metal)
PUI = price of unused substitute inputs (e.g., fiberglass)
T = technological improvements (e.g., robotic welding)
EE = entry or exit of other auto sellers
F = accidental supply interruptions from fires, floods, etc. RC = costs of regulatory compliance
PE = expected (future) changes in price
TA = adjustment time period
T/S = taxes or subsidies

Product A is more riskier as Std dev / mean = 0.8 and for Product B it is 0.5 thus A is more riskier Not yet rated Anonymous - 1 hour later

fot this we will calculate the coefficient of variation of both the product. coefficient of variation= SD/meanx100
coefficient of variation of Product A= 40000/50000x100= 80%
coefficient of variation of Product B= 12500/250000x100= 5%

higher the coefficient of variation higher will be the risk, therefore Product A is more risker.
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