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

Disadvantages of mixed economy, Disadvantages of Mixed Economy Large m...

Disadvantages of Mixed Economy Large monopolies can still exist in the private sector, and so competition does not really take place There is likely to be a lot of bureaucr

Private cost and social cost, Why we need to distinguish between private co...

Why we need to distinguish between private cost and social cost?

Real rigidities, Real Rigidities The New Keynesian economists  rely bo...

Real Rigidities The New Keynesian economists  rely both on nominal and real rigidities to  arrive at their conclusion that nominal changes in money  supply have real, and not

Optiimization, when firm can achieve optimization

when firm can achieve optimization

Factors for wage differential within the same occupation, FACTORS RESPONSIB...

FACTORS RESPONSIBLE FOR WAGE DIFFERENTIALS WITHIN THE SAME OCCUPATION i.     Differences in the environment:   For example a doctor sent to North Eastern Province must be pai

What do you mean by oligopoly, Q. What do you mean by Oligopoly? Type o...

Q. What do you mean by Oligopoly? Type of market condition that is most appropriate in the today's economy, is oligopoly. It's characterised by mutual interdependence among a f

#titlmonopolistic competition and oligopolye.., #quest Describe the oligopo...

#quest Describe the oligopoly market structure and give some examples.ion..

Theories of cost, what is traditional theory of cost/explain with suitable...

what is traditional theory of cost/explain with suitable diagram

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