Compute the optimal price that you should charge

Reference no: EM13687305

As a manager of a firm you find the marginal cost of the firm to be $10 and the fixed cost $100. For the range of prices that you are planning to charge, own price elasticity of demand is believed to be –1.25.

Compute the optimal (profit maximizing) price that you should charge. Show all calculations.

Reference no: EM13687305

Questions Cloud

Aristotle once wrote-The avarice of mankind is insatiable : Aristotle once wrote, “The avarice of mankind is insatiable”. Do you think that this is inextricably tied to our happiness? What negative effects might one see from the claim that “we require things consumed, burned up, replaced, worn out and discard..

Compare the Ricardian Model to the HeckscherOhlin Model : Compare the Ricardian Model to the HeckscherOhlin Model. What are similarities and what are the differences? Do they yield the same predictions?

What is monthly loan payment : A man buys a car for $18,000 with no money down. He pays for the car in 30 equal monthly payments with interest at 12 percent per annum, compounded monthly, what is monthly loan payment?

The price elasticity of supply of apples : The price elasticity of supply of apples is 2.5. A drop in the price for oranges reduced the demand for apples by 10 percent. We should expect the price of apples to drop by how much?

Compute the optimal price that you should charge : As a manager of a firm you find the marginal cost of the firm to be $10 and the fixed cost $100. For the range of prices that you are planning to charge, own price elasticity of demand is believed to be –1.25. Compute the optimal (profit maximizing) ..

Decide the demand function for hotel rooms for this hotel : As the manager of a 60-unit hotel you know that all units are occupied when you charge $80 a day per unit. Each occupied room costs $8 for service and maintenance a day. In addition there is a fixed cost of $400 a day. You have also observed that for..

Compute the value of the Lagrange multiplier : You are organizing a rock concert to benefit Amnesty International. The concert is to be held in a football stadium that has a seating capacity of 56,000. There are two kinds of seating: reserved and general.

Assembly workers gross substitutes or gross complements : After the price of car making robots fell by 10 %, the demand for assembly workers fell by 15 %. What is the cross wage elasticity of demand? Are robots and assembly workers gross substitutes or gross complements?

Draw the labor demand curve for baristas at the coffee shop : The labor demand curve for Baristas at coffee shops in a certain city is E=300-20W where E is the Barista hours demanded and W is the wage in dollars per hour. The equilibrium wage is $4 per hour but the government puts in place a minimum wage of $5 ..

User Account

All Pages