Digital clock radios and sells on average

Assignment Help Business Economics

Reference no: EM13770644

The ABC Company manufactures digital clock radios and sells on average 3,000 units monthly at $25 each to retail stores. It's closest competitor produces a similar type of radio that sells for $28.

A) If the demand for ABC's products has an elasticity coefficient of -3, how many will it sell per month if the price is lowered to $22?

B) The competitor decreases its price to $24. If cross-price elasticity between the two radios is 0.3, what will ABC's monthly sales be?

Reference no: EM13770644

Questions Cloud

Perfectly competitive industry when economic profit : What happens in a perfectly competitive industry when economic profit is greater than zero?

Labor cost of producing a pair of tennis shoes in china : Specifically with regards to the Ethical Dilemma case at the end of the chapter, which of the following is true? a ) Labor cost of producing a pair of tennis shoes in China is now cheaper than in South Korea and Indonesia. ( b ) Labor cost of produci..

Calculate the arc price elasticity of demand : In order to attract more customers on Mondays ( a slow day), Alex's pizza shop decided to reduce the price of their pizza rolls from $3.50 to $2.50. As a result, Monday sales increased from 70 to 130. Also, Alex's sales of soft drinks rose from 40 to..

Compute the return on each of the three investments : You have $1000 to invest over an investment horizon of three years. The bond market offers various options. You can buy (a) a sequence of three one year bonds (b) a three year bond or (c) a two year bond followed by a one year bond. Compute the retur..

Digital clock radios and sells on average : The ABC Company manufactures digital clock radios and sells on average 3,000 units monthly at $25 each to retail stores. It's closest competitor produces a similar type of radio that sells for $28. If the demand for ABC's products has an elasticity c..

If you were to perfectly collude with this new firm : The market demand for another product you are considering selling is Q(p) = 100 ? (1)p and as the 2. only producer of this product your production costs would be C(Q) = 40Q. You learn of a second firm wishing to enter this market. If you were to perf..

Assist in a worldwide economic recovery : Summarize in your own words which institutions have the most worldwide impact in our current economic environment. Why? Which are best posed to assist in a worldwide economic recovery? Has it been effective? Why or why not?

Market price elasticity of demand at the optimal quantity : The market demand for another product you are considering selling is Q(p) = 100 ? (1)p and as the 2. only producer of this product your production costs would be C(Q) = 40Q. What is the market price elasticity of demand at the optimal quantity?

What is the actual lerner index : The market demand for another product you are considering selling is Q(p) = 100 ? (1)p and as the 2. Only producer of this product your production costs would be C(Q) = 40Q. What is the actual Lerner Index?

User Account

All Pages