Expected price per product, Managerial Economics

 

Airbus

Boeing

Demand

P = 182.868 - 0.0003Q

P = 198.6592 - 0.00013Q

TVC Curve

TVC = 104.8822Q - 0.001Q^2 + 0.09Q^3

TVC = 25.8678Q - 0.00023Q^2 + 0.4Q^3

 

In addition, the joint group analysis determined the market would bear a price per plane somewhere within the following parameters:

Table 1

Price per plane
(million $)

Probability

125

.25

175

.25

225

.5

 

 First estimate the price per plane using the estimated prices and probabilities given in Table 1.

Part 2:

Price per plane

(million $)              Probability

-------------------------------------------

125                        .25

175                     .25

225                        .50

 

The estimated price per plane is given as a weighted average of all possible prices, where the weights are given by the respective probabilities of each price

So expected price per plane = (125*0.25)+(175*0.25)+(225*0.5) = $187.5 million

 

Posted Date: 7/13/2012 4:08:15 AM | Location : United States







Related Discussions:- Expected price per product, Assignment Help, Ask Question on Expected price per product, Get Answer, Expert's Help, Expected price per product Discussions

Write discussion on Expected price per product
Your posts are moderated
Related Questions
If a firm's organisational characteristics have not any implications for its behaviour or more possibly have implications that can be taken into account without adopting a behaviou


For some time, two firms have charged $0.90 per standard unit of crating materials for shipping a particular type of machine tool and each has been selling about 20,000 units per m

Strategic Reasons For political or strategic reasons, a country may not wish to be dependent upon imports and so may protect a home industry even if it is inefficient.  Many co

Q. Types of Market Structures by the Nature of Competition? Conventionally, the nature of competition is assayed to be the basic criterion for distinguishing different types of

Question: i) The manager of Top Rock Company is introducing a new product that will yield $200 millions in profits if the economy does not go into recession. However, if a rec

Q. What do you mean by Theory of Firm? Microeconomics especially the theory of firm, assumed importance and attracted considerable attention in the early 20 th century. This sh

(Kinky Demand Curve) Short Period Kinked demand curve was first used by Prof. Paul M. Sweezy to elucidate price rigidity under oligopoly. In an oligopoly market, firm knows that


Utility Utility is the amount of satisfaction derived from the consumption of a commodity or service at a particular time.  Utility is not inherent but a psychological satisfa