What quantity should be sold to achieve this goal

Assignment Help Business Economics

Reference no: EM131244442

The market demand for a gallon of ice-cream is P = 10 - .05Q.

a. The producer wants to produce where the elasticity of demand is unity. What price should they charge and what quantity should be sold to achieve this goal?

b. One of the management group is arguing for a price reduction as a way to sell more gallons and increase income. Is this a good suggestion?

c. If there are no costs in selling ice-cream what price should a profit maximizer charge?

Reference no: EM131244442

Questions Cloud

The same effect on factor income distribution : It has been argued that the effect of trade in goods and services has the same effect on factor income distribution in a country as would be the case if factors were completely mobile internationally. What is the reasoning behind this argument?

Created the context for widespread revolutionary upheaval : Discuss the ways in which the First World War, or the Great War, created the context for widespread revolutionary upheaval during and after the conflict. What was it about the war that led so many people around the world to rebel against their govern..

What stages or areas of global production-value chain : Fortune magazine conducts an annual survey and publishes the rankings of the World's Most Admired Companies. Locate the most recent publicly available ranking, follow the link to the best companies, and focus on the nine factors highlighted by Fortun..

A firm uses steel and aluminum to produce auto parts : A firm uses steel and aluminum to produce auto parts. The current input mix used by the firm is such that the marginal product of aluminum is equal to 800 units, while the marginal product of steel is equal to 500 units. what the concept of “ratio of..

What quantity should be sold to achieve this goal : The market demand for a gallon of ice-cream is P = 10 - .05Q. The producer wants to produce where the elasticity of demand is unity. What price should they charge and what quantity should be sold to achieve this goal?

What is the total town demand : Brian and Julie are the only people in town that like apple pie. Brian's demand is given by the equation P = 10 - 2Q, and Julie's demand is P = 10 - Q. 41. What is the total town demand? Suppose Eric moves to town. His demand is given by the equation..

Write the equation for cd budget constraint : Leena spent $100 per month on pens (X) and CDs (Y) at the Enron company store. Pens cost $2, and CDs cost $5. In July 2015, Leena purchased 15 pens and 14 CDs. Her utilometer readings at the end of the month showed that the marginal utility of the la..

What percentage of people on the mediterranean diet : Most doctors would probably agree that a Mediterranean diet, rich in vegetables, fruits, and grains, is healthier than a high-saturated fat diet. Indeed, previous research has found that the diet can lower risk of heart disease. What percentage of pe..

The indicated change in the exchange rate : Exchange Rates: US$1 = 6.43 yuan in 2011 and US$1 = 6.12 yuan in 2013. The data show that the dollar appreciated against the Chinese yuan. True or False? The indicated change in the exchange rate will tend to (increase/decrease) US exports to China a..

User Account

All Pages