### Illustrate what demand curve would look like if you sold

Assignment Help Microeconomics
##### Reference no: EM13453231

You are starting your own Internet business. You decide to form a company that will sell cookbooks online. Justcookbooks.com is scheduled to launch 6 months from today. You estimate that the annual cost of this business will be as follows:

 Technology (Web design and maintenance) \$5,000 Postage and handling \$1,000 Miscellaneous \$3,000 Inventory of cookbooks \$2,000 Equipment \$4,000 Overhead \$1,000

Part I

Deliverable Length: 1 graph plus calculations

You must give up your full-time job, which paid \$50,000 per year, and you worked part-time for half of the year.

The average retail price of the cookbooks will be \$30, and their average cost will be \$20.

Assume that the equation for demand is Q = 40,000 - 500P, where

Q = the number of cookbooks sold per month

P = the retail price of books.

Show what the demand curve would look like if you sold the books between \$25 and \$35.

1. What is the elasticity of the demand for cookbooks bought this way?
2. Is the business worth pursuing so far?
3. Suppose that you expect to sell about 22,000 cookbooks per month online, and assume your overhead, technology, and equipment costs are fixed. What are your total costs?
4. What are your marginal costs?
5. What market structure have you entered, and why?
6. What can you do to guarantee success in this market?
7. What pricing strategy might you use?

### Write a Review

#### Montereys restaurant is presently only restaurant in town

montereys restaurant is currently the only restaurant in town that sells mexican food. montereys advisors estimate that

#### How deficit spending relates to the economic collapse

Discuss how deficit spending relates to the economic collapse of the Greece and Spain economies. Relate their economic collapse to U.S. current economic problems. How does U.S. deficit spending affect our economy? Greece and Spain have introduced ..

#### Perform the cost-benefit analysis of obtaining graduate

perform the cost-benefit analysis of obtaining graduate degree. assess both short-term and long-term costs and benefits

#### Honda uses flexible plans in the manufacturing

Honda uses flexible plans in the manufacturing of its cars. Discuss whether this method of production results in optimum output.

#### Does the government pricing mandate satisfy the kaldor-hicks

Does the government pricing mandate satisfy the Kaldor-Hicks Criterion relative to thestatus quo? Is the government pricing mandate Pareto superior to the status quo? (Usechanges in consumer and producer surplus as your measures of the value of the p..

#### Assume that a monopolist sells a product with a total cost

Assume that a monopolist sells a product with a total cost function TC=1200 + 0.5Q2 and a corresponding marginal cost function MC = Q. The market demand curve is given by the equation P = 300-Q. a. Find the profit- maximizing output and price for thi..

#### Are these goods substitutes or complements for cigarettes

The case study presented in the chapter discussed cigarette taxes as a way to reduce smoking. Now think about the markets for other tobacco products such as cigars and chewing tobacco.

#### Determine what happens in the new equilibrium

Determine what happens in the new equilibrium. Does the individual buy more or less of OG. Does the individual buy more or less of HC. Explain why.

#### How industry price and output will approach the outcome

Assume the firms in an oligopoly produce a differentiated product and are initially colluding. If each firm begins to cheat (to increase sales) by underpricing the other firms, as the amount of cheating increases

#### Differences between industrial and home users of electricity

What are the primary differences between industrial users and home users of electricity that allow the utilities to discriminate between the two markets in terms of price? How do we compensate for these differences in order to improve the "common ..

#### Does article give a national or global perspective about

find a short news or online article that has been recently published within the current month that addresses health

#### In neoclassical growth models sources of growth is

in neoclassical growth models the sources of growth is exogenous usually technology. such theoretical models hence are