Demand and supply, Managerial Economics

Assignment Help:

The demand for good X is estimated to be: 
where px price of X in dollars
M = personal disposable income in trillions of dollars per year

Py = price of a competitive in dollars 

Ax = advertising expenditures in dollars $ per year

Qx = sales per year in U.S


Suppose PX = $5, PY = $10, M = $2500, and AX = $100.
a. What is the demand curve and quantity demanded for good X?

b. At the current price, will total revenue rise or fall if the price of the good is lowered?  Why?

c.  From the conditions in part a, what is the point income elasticity of demand?

d. What is the cross-price elasticity between goods X and Y?  Are goods X and Y substitutes or complements?  Why? Would the cross-price elasticity between Y and X be the same?

e.  From the conditions in part a, what is the point advertising elasticity of demand?

f.  Is the demand facing this company more sensitive to a one percent increase in income or a one percent increase in advertising expenditures?

g. Find the algebraic expressions for  the company's  total and marginal revenue functions. (Remember, TR = f(Q) and MR = f(Q).)

h. Produce a graph of total revenue and marginal revenue.  Graph total revenue for quantities up to 7,500 and put the marginal revenue graph on separate axes, and graph marginal revenue for quantities up to 7,500 also.

i.  What level of sales will maximize the  company's  total revenues?  What price  does  the company have to charge for X for that level of sales result?


Related Discussions:- Demand and supply

With aid of evidence in the given article , with the of evidence comprehens...

with the of evidence comprehensively discuss the market structure in the south African mobile telecommunications industry

Impact of inflation, THE IMPACT OF INFLATION Inflation has different e...

THE IMPACT OF INFLATION Inflation has different effects on different economic activities on both micro and macro levels.  Some of these problems are considered below: i.

Fundamental concepts of decision-making theory, fundamental concepts of dec...

fundamental concepts of decision-making theory The fundamental concepts of decision-making theory have been culled from microeconomic theory and have been furnished with new t

Institutional intervention theories, The institutional intervention theorie...

The institutional intervention theories Collective bargaining provides an example of what is sometimes called bi- lateral monopoly; the trade union being the monopolist suppli

Arguments in favour of monoploy, ARGUMENTS FOR MONOPOLIES Although mon...

ARGUMENTS FOR MONOPOLIES Although monopolies are usually hated mainly because their practice of consumer exploitation, there are some aspects of monopolies which are favourabl

Equilibrium and disequilibrium in balance of payments, Equilibrium and Dise...

Equilibrium and Disequilibrium in the Balance of Payments If on the current account , the value of exports is equal to the value of imports, the balance of payments is said t

Increemental principle, asumption and limitation of increemrntal,oppurtunit...

asumption and limitation of increemrntal,oppurtunity cost

Elasticity of price expectation, in the context of an environment of busine...

in the context of an environment of business,state briefly the implication of (1) Ee>1.....(2)Ee=1......(3)Ee=0.......(4)Ee

Write Your Message!

Captcha
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!

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