Determine the future price reduction necessary

Assignment Help Business Economics
Reference no: EM13214866

B. Lean is a catalog retailer of a wide variety of sporting goods and recreational products. Although the market response to the company's spring catalog was generally good, sales of B.B. Lean's $140 deluxe garment declines from 10,000 to 4,800 units. During this period, a competitor offered a whopping $52 off their regular $137 price on deluxe garment bags.

a) Calculate the arc cross-price elasticity of demand for B.B. Lean's deluxe garment bag.

b) B.B. Lean's deluxe garment bag sales recovered from 4800 units to 6000 units following a price reduction of $130 per unit. Calculate B.B. Lean's arc price elasticity of demand for this product.

c) Assuming the same are price elasticity of demand calculated in part B, determine the future price reduction necessary for B.B. Lean to fully recover lost sales (i.e., regain a volume of 10000 units).

 

Reference no: EM13214866

Questions Cloud

What happens to the price paid by cheese lovers in the u.s : How does this change the value generated by the market? Why do you say this? Where does this appear in your graph.
Calculate how much is the cost per machine : Alpine Inc. uses job order costing for its brand new line of sewing machines. The cost incurred for production during 2014 totaled $20,000 of materials, $8,000 of direct labor costs, and $8,000 of manufacturing overhead applied.
Identify the parent function : Write a function for the cost C of purchasing x fruits from Freddie in a given month and identify the parent function and list the transformations being applied to the parent function, in a correct order.
Explain investment project with the cash flows : If the discount rate is 8 percent, what is the future value of the cash flows in year 4? If the discount rate is 11 percent, what is the future value of the cash flows in year 4?
Determine the future price reduction necessary : Assuming the same are price elasticity of demand calculated in part B, determine the future price reduction necessary for B.B. Lean to fully recover lost sales (i.e., regain a volume of 10000 units).
Discuss the interrelationships between psychological social : Discuss the interrelationships between psychological social, cultural, and political factors as they impact health care management
Discuss how production based on comparative advantage : Discuss how production based on comparative advantage can increase domestic employment in India.
What is total revenue : Suppose a firm is producing 1,000 units of output (Q). Its average fixed costs are $50. Its average variable costs are $25. What is the total cost (TC) of producing 1,000 units of output (Q)? It the price (P) of the good is $100, what is total rev..
What is the expected value of v over the vacation : The chance of someone in the family getting sick over the relevant time period is 20%. What is the expected value of V over the vacation?

Reviews

Write a Review

 

Business Economics Questions & Answers

  Illustrate what are economic advantages to government

Illustrate what ways do health care expenses affect economy. Illustrate what are economic advantages to government involvement in healthcare.

  Good weather which improves crop production

Unusually good weather which improves crop production also a major oil discovery are examples of unexpected supply shocks in the economy

  Illustrate what is the total economic cost per acre

Given your answer above, what is the Habsi's opportunity cost per acre. Illustrate what is the total economic cost per acre for your answer.

  Illustrate what was average annual return with continuous

Your mutual fund increased in value from $10 to $40 over the last 15 years. Illustrate what was the average annual return with continuous compounding for the mutual fund over the 15 year period.

  Elucidate why they possess the same skills

Suddenly, 20,000 people immigrate from abroad and initially settle in the West. Elucidate  why they possess the same skills as the native residents and also supply their labor inelastically.

  As part of their chores on saturday mornings

As part of their chores on Saturday mornings, they have to clean the bathrooms also wash the floors of the house while their parents go grocery shopping.

  Case of robberies or harm by using these guns

Citizens can protect themselves in the case of robberies or harm by using these guns. Other states do not allow citizens to carry handguns

  Comparative advantage in bioinformatics in manufacturing

Why might the U.S. have a comparative advantage in bioinformatics but not in manufacturing and steel making.

  Elucidate what production level are scale economies exhaust

Derive an expression for average cost. Derive an expression for marginal costs. Is there any range of production characterized by scale of economies. Elucidate what production level are scale economies exhausted.

  Quinns data includes income

As control variables, Quinn's data also includes income the individual earned in the month the data was collected, and the amount that it rained in the month the data was collected.

  Explain why study pure competition if actual purely

Explain why study pure competition if actual purely competitive markets do not exist? What can we learn from highly competitive markets. Briefly discuss.

  Determine the effect of expansionary monetary policy

Determine the effect of expansionary monetary policy in the AS/AD model when the economy.

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