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

State the demand analysis, State the Demand analysis Analysis of dem...

State the Demand analysis Analysis of demand is assumed to forecast demand that is a basic component in managerial decision-making. Demand forecasting is of importance since

Borrowing facilities internationally, Borrowing Facilities If a countr...

Borrowing Facilities If a country's currency is not convertible, it can borrow from countries whose currencies are convertible and use the convertible currencies to make its i

State the fixed factor of production, State the Fixed factor of production ...

State the Fixed factor of production Input level of a fixed factor can't be varied in the short run. Capital falls under the category of fixed factor. Capital alludes to resour

What do you mean by cost function, Q. What do you mean by Cost Function? ...

Q. What do you mean by Cost Function? Cost function is a derived function. It's derived from the production function that describes the efficient method of production at any gi

Digressive tax, DIGRESSIVE TAX A tax is called digressive when the hig...

DIGRESSIVE TAX A tax is called digressive when the higher incomes do not make a due contribution or when the burden imposed on them is relatively less. Another way in which

Will you make any profits in the short run, Problem 1: Using relevant e...

Problem 1: Using relevant examples, discuss the pricing strategies that firms can use to capture value from their customers. Problem 2: You are a manager in a perfectl

Economic Model of a Company, I can''t figure out the economic model of a co...

I can''t figure out the economic model of a company that I''m supposed to write a report about. The company is a tier 2 supplier, and over the years has bought out several subsidia

Structural unemployment, a)      In 1948, the money GNP was $520 billion an...

a)      In 1948, the money GNP was $520 billion and the price index was 120.  In order to   make the 1948 GNP comparable with the base year, the 1948 GNP must be adjusted    to:

Me, In a one-shot game, if you advertise and your rival advertises, you wil...

In a one-shot game, if you advertise and your rival advertises, you will each earn RM5 million in profits. If neither of you advertises, your rival will make RM4 million and you w

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