You have been hired as a marketing consultant to Johannesburg Burger Supply, Inc., and you wish to come up with a unit price for its hamburgers in order to maximize its weekly revenue. To make life as simple as possible, you assume that the demand equation for Johannesburg hamburgers is linear. (a) Your market studies reveal the following sales figures: When the price is set at $2.00 per hamburger, the sales amount to 5000 per week, but when the price is set at $4.00 per hamburger, the sales drop to zero. Use these data to find the linear demand function q(p), where p is the price per hamburger and g is the number of hamburgers the sell at that price per week. q(p) = (b) Find the price elasticity of demand. E(p) = (c) When you raise the price by 1% from $2 per hamburger, the demand decreases by

You have been hired as a marketing consultant to Johannesburg Burger Supply, Inc., and you wish to come up with a unit price for its hamburgers in order to maximize its weekly revenue. To make life as simple as possible, you assume that the demand equation for Johannesburg hamburgers is linear. (a) Your market studies reveal the following sales figures: When the price is set at $2.00 per hamburger, the sales amount to 5000 per week, but when the price is set at $4.00 per hamburger, the sales drop to zero. Use these data to find the linear demand function q(p), where p is the price per hamburger and g is the number of hamburgers the sell at that price per week. q(p) = (b) Find the price elasticity of demand. E(p) = (c) When you raise the price by 1% from $2 per hamburger, the demand decreases by

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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You have been hired as a marketing consultant to Johannesburg Burger Supply, Inc., and you wish to come up with a unit price for its hamburgers in order to maximize its weekly revenue. To make life as simple as possible, you assume that the demand equation for Johannesburg hamburgers is linear. (a) Your market studies reveal the following sales figures: When the price is set at $2.00 per hamburger, the sales amount to 6000 per week, but when the price is set at $4.00 per hamburger, the sales drop to zero. Use these data to find the linear demand function q(p), where p is the price per hamburger and q is the number of hamburgers they sell at that price per week. q(p) = (b) Find the price elasticity of demand. E(p) = (c) When you raise the price by 1% from $2 per hamburger, the demand decreases Demand is of unit elasticity. v by X %.
Q2 The manufacturer of a low-sugar bottled juice estimated the following demand equation for its product using data from 25 retail stores around Dover city for the month of November: Q=-2000-15 Pje+ 8.4Px + 0.51 + 0.4A (220) (5.0) (5.6) (0.2) (0.16) R²=0.57 n=25 F = 6.83 Assume the following values for the independent variables: Standard error 1 Q denotes quantity sold per month Pje (denotes price of the bottled juice) = 240 (in cents) P. (denotes price of leading competitor's product) - 300 (in cents) I (denotes per capita income of the standard residential district in which the retail store is located) = 4000 (in dollars) A (denotes monthly advertising expenditure) = 7700 (in dollars) Using this information, answer the following questions: a. Compute elasticities for each variable.. b. Do you think that this firm should cut its price to increase its market share?
When sold for $260,000.00, Ferraris have an annual supply of 6431 vehicles and an annual demand of 6518 vehicles. When their price increases to $276,000.00, the annual supply increases to 6907, and the demand decreases to 5886 billion gallons. (a) Assuming that the supply and demand equations are linear, find the supply and demand equations. Supply Equation p = Demand Equation p = (Note: The equations should be in the form p = mq + b where p denotes the price (in dollars) and q denotes the quantity. The slope and y-intercept should be accurate to two decimal places). (b) Find the Equilibrium price and quantity. Equilibrium price p = Equilibrium quantity q = (Note: The equilibrium price and quantity should be accurate to two decimal places, and the equilibrium price should include a dollar sign).
Q2 The manufacturer of a low-sugar bottled juice estimated the following demand equation for its product using data from 25 retail stores around Dover city for the month of November: Q=-2000-15 Pje+ 8.4Px + 0.51 + 0.4A (220) (5.0) (5.6) (0.2) (0.16) R²=0.57 n=25 F = 6.83 Assume the following values for the independent variables: Standard error 1 Q denotes quantity sold per month Pje (denotes price of the bottled juice) = 240 (in cents) P. (denotes price of leading competitor's product) - 300 (in cents) I (denotes per capita income of the standard residential district in which the retail store is located) = 4000 (in dollars) A (denotes monthly advertising expenditure) = 7700 (in dollars) Using this information, answer the following questions: a. Compute elasticities for each variable.. b. Do you think that this firm should cut its price to increase its market share? Explain..
Mead Plumbing currently sells thread seal tape at a price of $42.00 per roll. Their research department has derived the price-demand equation as p = 60 -0.02x where x is the number of tapes that can be sold at $p per roll of tape. (d) If the current price changes by 10%, what will be the approximate percentage change in demand? (e) Find the price at which a percentage change in price produces the same percentage change in demand.
A large company in the communication and publishing industry has quantified the relationship between the price of one of its products and the demand for this product as Price = 160 -0.02 × Demand for an annual printing of this particular product. The fixed costs per year (i.e., per printing) = $51,000 and the variable cost per unit = $35. What is the maximum profit that can be achieved? What is the unit price at this point of optimal demand? Demand is not expected to be more than 4,000 units per year. The maximum profit that can be achieved is $144,313. (Round to the nearest dollar.) The unit price at the point of optimal demand is $ per unit. (Round to the nearest cent.)
The quantity demanded each month of Russo Espresso Makers is 250 when the unit price is $140. The quantity demanded each month is 1000 when the unit price is $110. The suppliers will market 750 espresso makers when the unit price is $76 or higher. At a unit price of $96, they are willing to market 2250 units. Both the supply and demand equations are known to be linear. (a) Find the demand equation. P = (b) Find the supply equation. p= (c) Find the equilibrium quantity and the equilibrium price. units $
A large company in the communication and publishing industry has quantified the relationship between the price of one of its products and the demand for this product as Price = 150 − 0.01 × Demand for an annual printing of this particular product. The fixed costs per year (i.e., per printing) = $50,000 and the variable cost per unit = $40. What is the maximum profit that can be achieved? What is the unit price at this point of optimal demand? Demand is not expected to be more than 6,000 units per year.
A large company in the communication and publishing industry has quantified the relationship between the price of one of its products and the demand for this product as Price=160−0.02×Demand for an annual printing of this particular product. The fixed costs per year (i.e., per printing)=$47,000 and the variable cost per unit=$40. What is the maximum profit that can be achieved? What is the unit price at this point of optimal demand? Demand is not expected to be more than 4,000 units per year. The maximum profit that can be achieved is $? (Round to the nearest dollar.) The unit price at the point of optimal demand is $? per unit.
The demand function for an item is given by d(x) = 100/ 0.01x 2 + 1 (20 ≤ x ≤ 50) where d(x) (measured in units of a thousand) is the quantity demanded per weak and x is the unit price in dollars. (a) Find the rate of change in demand with respect to price. (b) How fast is the demand changing at price equal to 30 (x = 30)?
A local firm produces three types of Pizza, for delivery to homes in the area. The owner has completed research, to discover the demand curves for each of the three pizzas. The schedules are shown below: (Quantities are per week). Price Pizza A (Qd) Pizza B (Qd) Pizza C (Qd) 12 800 0 100 11 840 0 200 10 880 400 300 9 920 800 400 8 960 1200 500 7 1000 1600 600 6 1040 2000 700 5 1080 2400 800 Plot the three demand curves, on one graph. Calculate PED for all three pizzas over the price range $9 to $10. Use the midpoint formula Explain why the three PED measures are different. What change would make all three PED measures become more elastic? What about more inelastic? NB: THIS NOT A GRADED QUESTION, ITS A SAMPLE PRATICE QUESTION. THANK YOU
When the price of a gallon of milk increases from $6 to $8, quantity demanded decreases to 27 gallons. Assuming the price elasticity of demand for milk is -0.3, what is the original quantity demanded? (assuming further that this is the point elasticity relative to the original point on the demand curve.) Please make sure you give a numerical answer with no units and/or space or period (.) or comma (,) before or after your answer. Enter your answer here