Login

Create Account
Customer Service Chat
+14156709189
info@expertsmind.com
Submit Homework/Assignment
Get quote & make Payment
Get Solution
Economics homework, Managerial Economics
1. A sporting goods company has hired a management consulting firm to analyze demand in 20 regional markets for one of its major products: a treadmill. The consultant uses data to estimate the following equation:
Where Q = Number of treadmills demanded
P = $1,200; Price of treadmills
A = $200; Advertising expenditures (in thousands)
I = $60; GDP per capita (in thousands)
PX = $1,000; Competitor’s price
= $150; Competitor’s advertising expenditures (in thousands)
a. Calculate the amount demanded for this product using the information given above
b. Plot the demand curve with P on the vertical axis and Q on the horizontal axis.
c. Calculate the price to sell 2,000 units.
d. What would be the effect on the sales of treadmills if the competitor reduces price by $100? What should be the change in P to offset the decrease in PX?
e. In response to competitor’s strategy of reducing PX, what else can the company do to keep sales at the same level if does not want to change P? (Base your answer on the information given above.)
2. The XYZ Tech Store had been selling a spreadsheet program at a rate of 100 units per month and a graphics program at a rate of 50 units per month. In September 2012, the EXZ Tech Store’s supplier lowered the price for the spreadsheet program, and the XYZ Tech Store lowered its price from $400 to $350.
a. If the price elasticity is 2.14, how many spreadsheets will be sold?
b. If the cross elasticity of spreadsheets and graphics program is 1.11, how many graphics programs will be sold if the initial quantity sold were 50?
c. As a result of this change in spreadsheet price what will happen to total revenue? Why? (No numerical answer needed. Just an explanation)
3. One of the leading dishwasher producers has estimated the following demand equation after analyzing 35 regional markets:
Q = + 20,000 – 40P + 30A + 20  40 + 90 I
(12000) (18.2) (44) (8.5) (52) (42)
R2 = 0.82 F = 32.26
The variables and their assumed values are
Q = Quantity
P = Price of basic model = 400
A =Advertising expenditures = 50
=Average price of the competitor’s product = 500
= competitor’s advertising expenditures = 30
I = per capita income = 50
a. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm’s marketing, pricing, and production policies?
b What would be the effect of a 6 unit increase in the competitor’s advertising expenditures?
c. What would be the change in your advertising expenditures to offset your competitor’s strategy?
d. Conduct a ttest for the statistical significance of each variable. Discuss the results of the ttests in light of the policy implications mentioned.
e. What proportion of the variation in sales is explained by by the independent variables in the equation? How confident are you about this answer? Explain using the Ftest.
4. Given the Production Function: Q = 30L + 9L2 0.5 L3, where Q = Output and L = labor input
a. At what value of L will Diminishing Returns take effect?
b. Calculate the range of values for labor over which stages I, II, and III occur?
c. Suppose that the wage rate is $24 and the price of output is $2 per unit. How many workers should
the firm hire?
d. At what value of L will Q be at its maximum? What is the maximum amount of Q?
e. If demand estimate for Q is between 1600 and 2000, what would be your plan in the long run to meet
customer demand?
5. Given the cost function: ,
a. At what level of Q does the firm achieve minimum average cost?
b. Assume that this is a firm in a perfectly competitive industry and the competitive price is $2/unit.
What should the firm do in the longrun?
Posted Date: 10/21/2012 5:56:33 PM  Location : United States
Ask an Expert
Related Discussions:
Economics homework, Assignment Help, Ask Question on Economics homework, Get Answer, Expert's Help, Economics homework Discussions
Write discussion on Economics homework
Your posts are moderated
Write your message here..
Related Questions
Characteristics of perfect competition market, Q. Characteristics of perfec...
Q. Characteristics of perfect competition market? Following are the characteristics of perfect competition market: • Large Number of Sellers andBuyers: As there are a lar
Williamsons model of managerial discretion, explain williamsons model of ma...
explain williamsons model of managerial discretion?
Discuss five negotiation skills of successful negotiators, QUESTION 1 N...
QUESTION 1 Negotiating skills remain a critical capability for procurement practitioners. Skilled negotiators have the potential to improve the negotiating outcome. Procurers o
Classical view on unemployment, CLASSICAL VIEW ON UNEMPLOYMENT The cla...
CLASSICAL VIEW ON UNEMPLOYMENT The classical economists as we observed in Unit 1 of this course, were of the view that full employment prevailed in the economy all the tim
Find the profit maximizing output and monopoly profit, The demand curve for...
The demand curve for the product of a monopolist is a straight line such that quantity just falls to zero at a price of Rs 20 per unit and that the maximum quantity (at zero price)
Explain markup pricing, Q. Explain Markup pricing? In addition to usi...
Q. Explain Markup pricing? In addition to using above methods to conclude a firm's optimal level of output, a firm can also set price to maximise profit. Optimal markup rules
Demand forecasting, factors affecting demand forecasting
factors affecting demand forecasting
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.
Economics for accountants, Economics for Accountants A few teachers an...
Economics for Accountants A few teachers and some students have questioned the rationale for including economics in a course of study for professional accountants. In order to
Explain about long run production function, Q. Explain about Long run produ...
Q. Explain about Long run production function? Long run is a phase adequately long so that all factors together with capital can be changed. The factors that can be increase
Assignment Help
Accounting Assignment Help
Economics Assignment Help
Finance Assignment Help
Statistics Assignment Help
Physics Assignment Help
Chemistry Assignment Help
Math Assignment Help
Biology Assignment Help
English Assignment Help
Management Assignment Help
Engineering Assignment Help
Programming Assignment Help
Computer Science Assignment Help
IT Courses and Help
ExpertsMind Services
Online Tutoring
Projects Assistance
Exam Preparation
Coursework Help
Programming Courses
Engineering Courses
Why Us ?
~Experienced Tutors
~24x7 hrs Support
~Plagiarism Free
~Quality of Work
~Time on Delivery
~Privacy of Work