Find the price-response function corresponding

Reference no: EM133426003

Question: A compact car manufacturer has conducted a market test and found that the willingness-to-pay distribution of its customers is Uniform (0, $25000). The total market size for the car they manufacture is 2,500,000. The car manufacturer can manufacture cars for an incremental cost of $15,000 apiece.

Find the price-response function corresponding to the willingness-to-pay distribution of the customers of the car manufacturer. Verify that the willingness-to-pay distribution corresponding to the price-response function you just found is Uniform (0, $25000).
Find the contribution maximizing price, the total contribution, the demand, and the price elasticity at the contribution maximizing price.
With the market segmented at $18,000 find the prices the maximize contribution.
With the market segmented as in Part b, if the cannibalization rate is 5 percent, what prices should the car manufacturer offer to maximize contribution?
Find the optimum segmentation level without cannibalization.
Find the optimum segmentation level with a cannibalization rate of 5 percent.
If the manufacturing capacity is constrained to 350,000 cars, what is the price that maximizes contribution?
If the market is segmented at the price of $18,000, and capacity is still constrained at 350,000 cars, what prices should the manufacturer change to maximize contribution?

Reference no: EM133426003

Questions Cloud

Discusses the responsibility to supervisors and supervisees : This discussion board is all about Section 4 from the Ethics Code for Behavior Analysts, which discusses the responsibility to supervisors and supervisees.

Develop a new organizational structure that is in line with : Develop a new organizational structure that is in line with the changing nature of your organization to support growth, employee engagement and cross-functional

What is daubert rating for child abuse potential inventory : What is the Daubert rating for the Child Abuse Potential Inventory (CAPI) and where can I review that info? Daubert rating such as error rate, validity.

How much paper will domestic producers supply : Suppose the government imposes a $4 tariff on paper. How much paper will domestic producers supply with the tariff in place? Calculate the tariff revenue

Find the price-response function corresponding : Find the price-response function corresponding to the willingness-to-pay distribution of the customers of the car manufacturer. Verify that the willingness

Discuss emotional displays in public versus private settings : Consider rules you may have internalized about emotional displays in public versus private settings, around specific emotions like happiness, pain, grief.

Premium theories in term structure of interest rates : explain the main differences between the expectations vs liquidity premium theories in term structure of interest rates

What was the cpi for 2020 if the base year was 2019 : what was the CPI for 2020 if the base year was 2019 and what was the rate of inflation from 2019 to 2020

How should merck handle criminal investigation and lawsuits : What are the critical issues in this case and who are the stakeholders? What stakeholders should Merck target first in its corporate response?

User Account

All Pages