Question

In: Economics

Cascadia Industries estimates the demand for its product to be: Qx = 380 - 10Px -...

Cascadia Industries estimates the demand for its product to be:

Qx = 380 - 10Px - 2Py + 3Pz + .1M, where M is income and Py and Pz are the prices of related goods. Py = $15, Pz = $50, and M = $5,000

a. The demand function for Cascadia’s product can be written

Qx = _______________________. The inverse demand function can be written Px=_________________., and marginal revenue is MR = ________________.

b. Cascadia would maximize sales revenues at a price of $_______________, and a quantity of _________________.

Now assume Px = $75

c. The quantity demanded is Q = ____________________.

d. The price elasticity of demand is _______________.

e. The cross-price elasticity of demand between good X and Good Z is Good Z is a ___________ (substitute, complement).

Solutions

Expert Solution

Rahul Sunny answered 6 months ago
Next > < Previous

Related Solutions

The demand for company X's product is given by Qx = 12 – 3Px + 4Py....
The demand for company X's product is given by Qx = 12 – 3Px + 4Py. Suppose good X sells for $3.00 per unit and good Y sells for RM1.50 per unit. Calculate the cross-price elasticity of demand between goods X and Y at the given prices. Are goods X and Y substitutes or complements? What is the own price elasticity of demand at these prices? How would your answers to parts i and iii change if the price of...
The demand for company X's product is given by Qx = 12 – 3Px + 4Py....
The demand for company X's product is given by Qx = 12 – 3Px + 4Py. Suppose good X sells for $3.00 per unit and good Y sells for $1.50 per unit. a. Calculate the cross-price elasticity of demand between goods X and Y at the given prices. b. Are goods X and Y substitutes or complements? Explain your answer. c. What is the own price elasticity of demand at these prices?
Suppose that a firm estimates that the demand curve for its product is Q= 120,000 -...
Suppose that a firm estimates that the demand curve for its product is Q= 120,000 - 10,000P.  Suppose that the firm has fixed costs of $12,000 and variable costs per unit (AVC) is $1.50. Write an equation for total profits in terms of Q.  At what level of output (Q) are total profits maximized?  What price will be charged?  What are total profits at this output level? Check your answers in part e) by equating marginal revenue and marginal cost functions and solving for...
Q10. The demand for good X is given by the following equation:        QX =...
Q10. The demand for good X is given by the following equation:        QX = 325 - PX – 1.5 PW + 1.25 PG + 0.8 PY - 0.1 M where   QX is the number of X sold per week; PX, PW, PG, PY are the prices of the respective goods and M is the average monthly income. Currently PX = 200, PW = 50, PG = 80, PY= 125, and M = 2000. (a) Should PX be increased...
A demand function has been estimated to be Qx = 550 – 5Px + 1.5Py -...
A demand function has been estimated to be Qx = 550 – 5Px + 1.5Py - 2Y. If drawn as a traditional demand curve connecting Px with Qx, an increase in Py would be visualized as a:   Group of answer choices shift of the entire demand curve right. movement up the stationary demand curve. movement down the stationary demand curve. shift of the entire demand curve left.
Bonita Industries estimates its sales at 170000 units in the first quarter and that sales will...
Bonita Industries estimates its sales at 170000 units in the first quarter and that sales will increase by 13000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $35. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale. Cash collections for the third quarter are budgeted at $5625200. $7820400. $3896900. $6778100.
Northam industries is expanding its trade into regional NSW and estimates the intial cost to be...
Northam industries is expanding its trade into regional NSW and estimates the intial cost to be $1.71 million. It has forecast net revenues of $770,000, $970,000, and $800,000 at the end of each of the next three years. Given a required rate of return of 10 percent p.a., what is the NPV and the payback period of this project?
Suppose the demand for good X can be represented by the following equation: QX = 35...
Suppose the demand for good X can be represented by the following equation: QX = 35 - 2P. Furthermore, suppose that the demand for good Y can be represented by    QY = 25 - 0.1P. a. Find the elasticity of demand for both good X and good Y when the price of X is $15 and the price of Y is $10. b.If the community’s goal is to raise tax revenue as efficiently as possible, what should be the ratio...
A consumer’s demand function for good x is Qx = 100 – Px – Py/2 +...
A consumer’s demand function for good x is Qx = 100 – Px – Py/2 + Pz/2+ I/100 with Qx representing the quantity demand for good x, Px the price for good x, Py the price for good y, Pz the price for good z, and I the consumer’s income. c) Determine whether good y is a complement or substitute to good x. d) Determine whether good z is a complement or substitute to good x. e) Determine whether good...
Based on the best available econometric estimates, the market elasticity of demand for your firm’s product...
Based on the best available econometric estimates, the market elasticity of demand for your firm’s product is -1.5. The marginal cost of producing the product is constant at $125, while average total cost at current production levels is $190. Determine your optimal per unit price if: a) You are a monopolist. $_____ b) You compete against one other firm in a Cournot oligopoly. $____ c) You compete against 19 other firms in a Cournot oligopoly. $_____
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT