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Q. "An auto-service establishment has approximated its monthly cost function as follows:
TC = 6000 + 10 Q where Q is number of cars it services each months and TC represents its total cost. Firm is targeting 35,000 net monthly profit servicing 2000 cars.
a. Illustrate what price should firm charge to realize targeted profit?
b. Illustrate what would be its (cost-based) mark-up ratio?
b. Now suppose a demand curve firm face is: Q = 3000 - 50 P. Is firm going to achieve its profit goal? Explain.
c. If your to answer to (b) is "no", illustrate what would be optimal mark-up ratio for this firm?"
Should Roscoe's Rascals match the price offered by the competitor.
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The third largest city of a country has a population of 12.5 million.
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Elucidate how does knowledge of price elasticity among different groups of clients or for various products enable managers to price discriminate or change different prices for these groups.
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