User Account

All Pages

2 questions., Managerial Economics

Assignment Help:
Question 1:
Martha National County Club is a golf club in an isolated wealthy community and accepts only females as members. There are 1,000 identical female members of the club and a typical member has a yearly demand for rounds of golf expressed as:
P = 150 – Q?,
where Q is the number of rounds of golf per year at a green fee of P per round.
This year, Martha has priced its annual membership fee at $7,000 and its green fee at $30 per round of golf. (Green fee includes caddie/buggy fee as well.) It costs Martha a constant $25 to provide a round of golf for each member. Martha’s annual fixed cost of running the club is $1,000,000.
(1) (20 marks) Martha is now contemplating lowering its annual membership fee to $6,500 and raising its green fee to $40 for the next year. The club’s Board feels that the 1,000 members would still be interested in maintaining their memberships at Martha next year if the price is right and that their demand will be the same as this year’s.
When it prices the club’s yearly membership and green fees for next year, should Martha continue with its current pricing scheme or switch to the new one?
(2) (20 nmarks) The community has another 1,000 identical male golfers whose individual yearly demand for golf rounds is known to be
P = 100 – Q
, but the female-only policy at Martha is forcing the male golfers to drive 100 km to a neighbor town to play golf.
There have been rallies for years led by Mr. Hootie, the chairman of The Community Council?of Men’s Organizations, during the week of the major club championship tournament ‘The Mistresses’ hosted by Martha National, and the club was urged to change its male- discriminating policy. A board member Ms. Burks at Marta National this year proposed an idea:
“Let’s erase the female-only clause from our Club Charter. Still, we can keep them away if we set the membership and green fees smart so that they don’t have an incentive to join.”
What yearly membership and per-round green fee would Martha National Golf Club have to charge to successfully exclude male golfers while trying to make as much profits as possible from the female golfers? Assume that a gender-specific pricing scheme will bring about more serious petitions and therefore every member should be charged the same set of membership and per-round green fees.
(3) (20 marks) Would it be more profitable for Martha National to cater to both female and male golfers at its best outcome? Quantify your answers. Assume that every member should be charged the same set of membership and per-round green fees.


Question 2

Tight-Sleep, Inc. is a large pharmaceutical firm based in Malaysia. It sells its brand of sleeping pills named ECONTONIN both in Asia and in Europe. Tight-Sleep hired the NUS economist Jo to estimate the daily demand in Asia and Europe, which turned out to be:
QA =60-PA andQE =44-PE
where QA(QE) is the quantity of the sleeping pills demanded in Asia(Europe) and PA (PE) is the unit price of the sleeping pills in Asia(Europe). Tight-Sleep’s average total cost (ATC) of producing sleeping pills is:
ATC=4+0.1QT,whereQT =QA +QE
is the total number of sleeping pills produced by Tight-Sleep. Transportation costs are a negligible portion of the total cost and can be neglected. Your client (Tight-Sleep) wants answers (and quickly) for the following answers.
. (1) (20 marks) If Tight-Sleep can successfully prevent arbitrage resale between the two markets, what quantities under what prices should the firm sell in each region? And what would be the maximum profit level that could be achieved under such a policy? ?(Assume that each region prohibits the firm from charging different prices for different consumers or different units ‘in each region’. That is, only the third-degree price discrimination is considered.) ?
. (2) (20 marks) Suppose that Malaysia signed an international trade agreement with the Asian and European countries, under which an MFN clause with respect to pricing applies: the identical products should be charged the same price everywhere. How much better would Tight-Sleep do by following the above strategy in (1) as compared to the best they could do under this new MFN clause? ?

Related Discussions:- 2 questions.

Menu costs, Menu Costs   Why do firms not change their prices very  fre...

Menu Costs   Why do firms not change their prices very  frequently? Obviously, the costs of changing prices at  frequent intervals and in small amounts must be more  than the b

Describe the forecasting method in managerial economics, Describe the Forec...

Describe the Forecasting method in managerial economics It is a technique or a method to predict many future aspects of a business or any other operation. For illustration, a r

Marris managerial enterprise model, Why do the managers in marris model max...

Why do the managers in marris model maximise their satisfaction by choosing a higher growth rate and a lower valuation ratio when compared to the profit maximisation

The extreme end of the beach, Assume that Nicolas and Orson plan to sell so...

Assume that Nicolas and Orson plan to sell soft drinks on a beach this summer. The beach is 400 meters long and sunbathers are spread evenly across its length. Nicolas and Orson se

Log liner regression, How do I do a log linear regression in excel

How do I do a log linear regression in excel

Upper and lower bound, Consider the following table. It shows the market sh...

Consider the following table. It shows the market shares of seven clothing stores (A to G) in five dissimilar cities. a) Calculate the Herfindahl index (?H) for each city.

Objectives of government in economy, OBJECTIVES OF GOVERNMENT Governme...

OBJECTIVES OF GOVERNMENT Government policies are required in market economies to achieve certain goals.  There are broadly two types of government policies viz; Microeco

Show the importance of demand forecast, Q. Show the importance of Demand f...

Q. Show the importance of Demand forecast? Demand forecast for a particular commodity furthermore offers recommendations for demand forecast of associated industries. For exam

ELASTICITY OF DEMAND, THE COMPANY WOULD TO INCREASE THE PRICE OF STEEL IT...

THE COMPANY WOULD TO INCREASE THE PRICE OF STEEL IT SELLS BY 6% THE MANAGEMENT FORECAST ED THAT INCOME WILL RISE BY 4% NEXT YEAR AND THAT PRICE OF ALUMINIUM WILL FALL BY 2%. IF THE

Annual and monthly premiums charged, Green Shield Insurance gives NEMO Corp...

Green Shield Insurance gives NEMO Corporation with coverage for prescriptions, dental work, and extended health services. Every subscriber uses $435 worth of dental services per ye

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

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: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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