Should einstein bagels spend more on advertising

Reference no: EM13219891

The demand function for Einstein Bagels has been estimated as follows: Qx = -15.87 - 40.73Px + 84.17Py + 0.55Ax where Qx represents thousands of bagels; Px is the price per bagel; Py is the average price per bagel of other brands of bagels; and Ax represents thousands of dollars spent advertising Einstein Bagels.

a. Calculate the price elasticity of demand for Einstein's Bagels and explain what it means.

b. Derive an expression for the (inverse) demand curve for Einsteins's Bagels.

c. If the cost of producing Einstein's Bagels is constant at $0.10 per bagel, should they reduce price and there after, sell more bagels (assume profit maximization is the company's goal)?

d. Should Einstein Bagels spend more on advertising?

Reference no: EM13219891

Questions Cloud

Display the most frequently occurring word : the program should count how many times each word appears and display the most frequently occurring word, along with how many times it occurs.

What was the rate of return on the 216 dollar million paid : Water damage from flooding related to hurricane Sandy in two northeastern Cities resulted in damages estimated at $216 million. As a result of the claimant payouts, insurance companies raised homeowners' insurance rates by an average of $118 per y..

Calculate and display the number of gallons of water : The application should calculate and display the number of gallons of water used and the total charge for the water. The charge is 2.05 per 1000 gallons, or 00205 per gallon. use two independent sub procedures : one to make the calculations and th..

Evaluating the boiling point and freezing point of solution : The antifreeze in a car was a 50% by weight solution of ethylene glycol C2H6O2 in water. Calculate the boiling point and freezing point of this solution. (for H2O: Kb= 0.52 C/m... Kf=1.86 C/m

Should einstein bagels spend more on advertising : The demand function for Einstein Bagels has been estimated as follows: Qx = -15.87 - 40.73Px + 84.17Py + 0.55Ax where Qx represents thousands of bagels; Px is the price per bagel; Py is the average price per bagel of other brands of bagels

What is the peak achievable performance : Consider a memory system with a level 1 cache of 32 KB and DRAM of 512 MB with the processor operating at 1 GHz. The latency to L1 cache is one cycle and the latency to DRAM is 100 cycles.

Calculate the minimal sum logic for each output : How would I do this problem? When it says 4-bit two's complement numbers, what does it mean?

What is the after tax initial investment in the defender : current asset (defender) is being evaluated for potential replacement. It was purchased four years ago at a cost of $62,000. It has been depreciated as a MACRS (GDS) five-year property- class asset. The present MV of the defender is $12,000.

Explain the same heat capacities as pure water : Determine q for the acid-base reaction, assuming that the liquids have densities of 1.00 g/mL and the same heat capacities as pure water.

User Account

All Pages