Estimate a linear joint demand curve, Financial Accounting

Assignment Help:

Pinapple Inc. is deciding how to price its two lines of laptops, one of which is a light one for travel (which is called Light) and the other is a powerful one (called Power). These products are substitutes (consumers pick between them depending on prices). Based on the data points below, estimate a linear joint demand curve - that is, a demand curve for each product that is linear in each price:

Demand_Power = A_1 + B_1*Price_Power + C_1*Price_Light

Demand_Light = A_2 + B_2*Price_Power + C_2*Price_Light

Price of

Power

 

Price of

Light

 

Demand of

Power

(in thousands)

Demand of

Light

(in thousands)

1000

1000

15166

7311

1500

1000

12266

7387

2000

1000

10875

7499

2000

1500

10222

5992

2500

1500

7771

6398

3000

1500

4410

6210

3000

2000

5320

4431

Use your estimated demand curve to recommend prices for the two products to the CEO of Pinapple Inc. The cost of manufacturing a Light computer is $770 and the cost of manufacturing a Power computer is $930. Make sure the prices you recommend are within the ranges tested ($1000 to $3000 for the Power and $1000 to $2000 for the Light). You should also include in your report a comparison of the profit margins of the two products.


Related Discussions:- Estimate a linear joint demand curve

The notes to the accounts-financial statement, THE NOTES TO THE ACCOUNTS ...

THE NOTES TO THE ACCOUNTS The notes to the accounts provide additional information on the a/c policies that the company has adopted the make-up of some of the items appearing on

Property transferred before bankruptcy, PROPERTY TRANSFERRED BEFORE BANKRUP...

PROPERTY TRANSFERRED BEFORE BANKRUPTCY (a) Voluntary settlements : The trustee can claim all property settled by the bankrupt on other persons within two years preceding the

Current yields for t-bonds, ACT presently is all-equity financed. This refl...

ACT presently is all-equity financed. This reflects the stance of the former CEO, a dominant personality who stated repeatedly: "I don't want us to be in thrall to the demands of t

Determine the amount and character of the recognized gain, On May 2, 1986, ...

On May 2, 1986, Hannah acquired residential real estate for $450,000. Of the cost, $100,000 was allocated to the land and $350,000 to the building. On January 20, 2013, the buildin

Secret trusts-trusts laws and accounts, SECRET TRUSTS The initial basis o...

SECRET TRUSTS The initial basis of the doctrine of secret trusts was the refusal of equity to permit a statute to be used as an engine of fraud (e.g. Bannister v Bannister).  Cer

Draw budget constraint for cooking oil and flour, 1. You can buy any quanti...

1. You can buy any quantity of cooking oil at $5 per litre and any quantity of flour at $2 per kilo. You have allocated $20 to spend on cooking oil and flour.    (a) If you choo

Powerpoint presentation, I have a presentation on an article (around 20 pag...

I have a presentation on an article (around 20 pages). I also need 2 current real life examples (2 companies) to support the presentation. Can you do that? How long it will take yo

Acts of bankruptcy, ACTS OF BANKRUPTCY The following are the acts of ba...

ACTS OF BANKRUPTCY The following are the acts of bankruptcy on which a petition may be founded: (a) Assignment of property to trustee:   whereby one gives up all his proper

Just-in-time manufacturing system, Which of the following statements is FAL...

Which of the following statements is FALSE of Just-In-Time (JIT) manufacturing systems? Answer Demand pull means a closer relationship with the customer. The power of supp

Write Your Message!

Captcha
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