User Account

All Pages

Which of the two strategies will generate the highest

Assignment Help Microeconomics
Reference no: EM13312454

Gobi Inc. has sales of $40,000,000. The contribution margin is $0% and the fixed costs are $3,000,000. The variable costs per unit is $12. The company is considering two different strategies for increasing their profits:

1. Spend $2,000,000 in advertising; the results is expected to increase the company's sales by 25%

2. Reduce the price by 20%; the price demand elasticity is -3.0

Which of the two strategies will generate the highest overall profits? Shall all calculations.

Reference no: EM13312454

Questions Cloud

Strategic analysis and strategic options : Strategic Analysis and Strategic Options
Find the magnitude of velocity of canoe relative to river : A canoe has a velocity of 0.400 southeast relative to the earth. Find the magnitude of the velocity of the canoe relative to the river
How to compute the saturated unit weight of the silt : All the silt is saturated even after the water table is lowered. (In this problem, treat the unit weight above the water table as bulk unit weight and the unit weight below the water table as saturated unit weight.)
Calculate the direction of sparkys net displacement : Jim's dog Sparky runs 45.0m northeast to a tree, then 65.0m west to a second tree, and finally 25.0m south to a third tree. Calculate the direction of Sparky's net displacement
Which of the two strategies will generate the highest : Gobi Inc. has sales of $40,000,000. The contribution margin is $0% and the fixed costs are $3,000,000. The variable costs per unit is $12. The company is considering two different strategies for increasing their profits:
Find what is the degree of saturation of the field sample : Let us pretend you are an earthwork construction control inspector and you are checking the field compaction of a layer of soil. After compaction in the field, the density of soil was checked by excavating part of the compacted soil
What is the change in gravitational potential energy : A 20kg box slides up a 12m long incline at an angle of 30 degrees with the horizontal. What is the change in gravitational potential energy
What is the angular magnification of the telescope : A telescope has an objective with a refractive power of 1.00 diopters and an eyepiece with a refractive power of 300 diopters
Determine magnitude of its velocity after the car has travel : A car travels along a circular path such that its speed is increased by a_t=0.5e^t(m/s^2) ,where t is in seconds. The radius of curvature of the path is 30m. Determine the magnitude of its velocity after the car has traveled s = 18m starting from r..

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd