Bernard’s Hair Design is P = 15 – 0.15Q where Q is the number of cuts per week and P is the price of a haircut. Terry is considering raising her price above the current price of RM9. Terry is unwilling to raise price of the price hike will cause revenue to fall. Should Terry raise the price of haircuts above RM9? Why or why not? b) Terry is trying to decide on the number of people to employ based on the following short-run production function: Q = 12L – 0.5L2 Where
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peak travel/tourism seasons at each of its locations. The total number of scheduled tours varies based on the number of vessels available at each location. Copa also offers its ships exclusively for groups. In fact‚ a significant portion of Copa’s revenues come from group bookings. Typically‚ group customers book for corporate events‚ weddings‚ or private celebrations (e.g. family reunion). Copa customizes the table arrangement‚ the deck‚ and the menu to suit its customers’ needs for a group event
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What Quantity of Output should the Firm Produce and Sell and at What Price? The Answer depends on Revenue and Cost Predictions. The Solution is Found using Marginal Analysis. Expand an Activity if and only if the Extra Benefit exceeds the Extra Cost. MAXIMIZING PROFIT FROM MICROCHIPS 2.2 A1. Focus on a single Product‚ A2. whose Revenues and Costs can be predicted with Certainty. Revenue can be predicted using the Demand Curve. P = 170 - 20Q or equivalently‚ Q = 8.5 - .05P Write profit
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wealth The reduction in peoples ’ wealth caused by a stock-market crash reduces their income‚ leading to a reduction in the demand for minivans. Question 3 If demand is inelastic how will an increase in price change the total revenue? Answer: What do we know about Price Elasticity of Demand and how does it affect the price change of a production? Basically‚ the price elasticity of demand is a platform to measure
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they employ due to the increase in the minimum price‚ thereby reducing social welfare. . Explain why a profit maximizing firm produces the output that equates marginal revenues to marginal costs (MR=MC) A profit maximising firm would strive to operate at the point where the output equates marginal revenue to marginal costs‚ where marginal revenue is the revenue generated from the sale of 1 more unit and marginal costs are the costs incurred by the production of that unit.
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Place your answer on the answer sheet. There are 50 questions‚ each worth 2 points. 1) In 1985‚ Alice paid $20‚000 for an option to purchase ten acres of land. By paying the $20‚000‚ she bought the right to buy the land for $100‚000 in 1992. When she acquired the option in 1985‚ the land was worth $120‚000. In 1992‚ it is worth $110‚000. Should Alice exercise the option and pay $100‚000 for the land? A) Yes. B) No. C) It depends on what the rate of inflation was between 1985 and 1992
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CONSULTING PROJECT Pricing and Production Decisions at PoolVac‚ Inc. PoolVac‚ Inc. manufactures and sells a single product called the “Sting Ray‚” which is a patent-protected automatic cleaning device for swimming pools. PoolVac’s Sting Ray accounts for 65 percent of total industry sales of automatic pool cleaners. Its closest competitor‚ Howard Industries‚ sells a competing pool cleaner that has captured about 18 percent of the market. Six other very small firms share the rest of the industry’s
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manufactures account for 75% of the worldwide tire production. The largest is Groupe Michelin from France‚ who markets the Michelin‚ Uniroyal‚ and BF Goodrich brands. The second-largest producer is Goodyear. Their biggest brands are Goodyear‚ Kelly-Springfield‚ Lee‚ and Douglas. Finally‚ Bridgestone Corporation‚ whose major brands are Bridgestone and Firestone‚ is a Japanese firm and the world’s third-largest producer. Consumer Behavior Demand for tires in the OEM is derived; meaning‚ tire volume
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University iTunes Music Pricing Adopting a variable pricing policy might increase the sales revenue of Apple’s Music Store. Pricing the more popular songs at a higher price and the less popular ones at a lesser rate would generate higher sales for the lesser popular ones. Thus making up for the slight drop in sales of expensive tracks and ultimately working towards overall increased revenues. Although most songs with a higher price point experienced nearly 21 % drop in sales‚ the 29 % increase
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1-2: Table: Barrels of Oil Barrel of Oil Produced 1 2 3 4 5 6 7 8 9 10 Total Revenue $50 100 150 200 250 300 350 400 450 500 Total Cost $4 10 21 38 61 90 126 176 266 390 Price $50 50 50 50 50 50 50 50 50 50 1. (Table: Barrels of Oil) Refer to the table. How many barrels of oil should the company produce to maximize profit? A) 6 B) 7 C) 8 D) 9 2. (Table: Barrels of Oil) Refer to the table. What is the marginal revenue of producing the fifth barrel of oil? A) 61 B) 50 C) 200 D) 250 3. Stating that
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