Reference no: EM13247493
Consumer Demand Analysis and Estimation Applied Problems. Please, complete the following two applied problems in a Word or Excel document. Show all your calculations and explain your results. Submit your assignment in the drop box by using the Assignment Submission button.
1. Roshima is researching universities where she could study for her MBA degree. She is considering 3 major attributes that she considers important in her choice: ranking, price, and location. The value she places on each attribute, however, differs according to whether she remains full-time employed during her studies or quits her job and focuses on her degree. If she continues to work full time and takes all her courses online,
BUS640: Managerial Economics Online
19 then ranking is the most important attribute, twice as important as price and three times as important as location. If she quits her job and attends school full time, then location becomes three times as important as ranking and twice as important as price. She is considering two universities, respectively, the MBA program at Arizona State University (ASU) and the MBA program at University of Phoenix (UOP), both of which are priced at approximately $25,000. She has rated each attribute on a scale of 1 to 100 for each of the two schools.
a. Which of the two options should Roshima pursue of she wants to keep her full-time job? (Calculate the total expected utility from each school option and compare. Graph is not required)
b. Which of the two options should she pick if she plans to quit her job and dedicate to her studies?
c. Which option should she pursue if the probability of being laid off and unable to find a new job is estimated as 0.6? Show your calculations and explain your reasoning.
2. The demand function for Einstein Bagels has been estimated as follows:
Qx = -15.87 - 40.73Px + 84.17Py + 0.55Ax
where Qx represents thousands of bagels; Px is the price per bagel; Py is the average price per bagel of other brands of bagels; and Ax represents thousands of dollars spent advertising Einstein Bagels. The current values of the independent variables are Ax=216, Px=0.85, and Py=0.79.
a. Calculate the price elasticity of demand for Einstein's Bagels and explain what it means.
b. Derive an expression for the (inverse) demand curve for Einsteins's Bagels.
c. If the cost of producing Einstein's Bagels is constant at $0.10 per bagel, should they reduce price and thereafter, sell more bagels (assume profit maximization is the company's goal)?
d. Should Einstein Bagels spend more on advertising?
|
What profit do you expect that the firm will make in the
: Greener Grass Company (GGC) competes with its main rival, Better Lawns and Gardens (BLG), in the supply and installation of in-ground lawn watering systems in the wealthy western suburbs of a major east-coast city. Last year, GGC's price for the typi..
|
|
Determine the active factors
: What kind of model is the above model and what factors are un-estimable? What is the resolution and why - determine the active factors that affect the light intensity.
|
|
Explain the overall rate law for the polymerization
: H--C(triplebond)C--H Acetylene. The overall rate law for the polymerization is first order with respect to both acetylene and the catalyst used for the reaction. What, therefore, is the slowest step of an addition polymerization: initiation, propa..
|
|
Explain bicarbonate buffering system is one of the major ph
: The bicarbonate buffering system is one of the major pH regulating mechanisms in your blood. which of the following is not a compound formed in th transport of carbon dioxide via this buffering system.
|
|
Which of the two options should she pick if she plans
: Where Qx represents thousands of bagels; Px is the price per bagel; Py is the average price per bagel of other brands of bagels; and Ax represents thousands of dollars spent advertising Einstein Bagels. The current values of the independent variables..
|
|
How sensitive is the ror to the salvage value
: You are evaluating the feasibility of adding an injection molder to fabricate plastic sporks (everybody’s favorite harmless utensil) for the US Facility for the Criminally Insane. An injection molder will cost $1,200,000 installed.
|
|
Determine what is the order of the given system
: c) Find the output y(t) in response to the input x(t) = 6 u(t), where u(t) is the unit step function. d) Find the output y(t) in response to the input x(t) = δ(t) A linear system has the system response function H(s)= -7/(s+4)
|
|
Are you risk-averse risk-neutral or risk-lover
: Apply the maximin criterion, assuming that the worst outcome in Business 1 is to lose $5,000, whereas the worst outcome in Business 2 is to make only $5,000 in profit.
|
|
Explain what is the net ionic equation to show the formation
: what is the net ionic equation to show the formation of a precipitate (insoluble salt) when the following solutions are mixed. write none if no insoluble salt forms. a)AgNo3(aq) + Na2SO4(aq). b)KCl(aq) + Pb(NO3)2(aq). c)CaCl2(aq) + (NH4)3PO4(aq). ..
|