Question

In: Economics

4) The “Fox Cabaret” is a popular Vancouver nightclub. Assume it has adopted the following pricing...

4) The “Fox Cabaret” is a popular Vancouver nightclub. Assume it has adopted the following pricing policy. To enter the club on a Friday or Saturday evening, you pay a cover charge of $20. When you enter the club you then pay $10 for each alcoholic beverage you consume. Explain the logic of this pricing system from an economist’s perspective.

Solutions

Expert Solution

Ans) Cover charge is a entry amount which is mainly charged by popular nightclub. Many clubs charges low cover charge as much as possible. If "Fox Cabaret" is charging $20 as cover charge then it wants to reduce demand, as the price of entry is high so the demand or who want to entry in this club will reduce, and after that it will not face loss because of the popularity in the region. To reduce the demand / line over the counter they will follow this policy. To reduce the consumption of alcoholic beverage he charged $10. As alcohol is a bad commodity in the economics terms because it is not good for health so for reduction of demand for alcohol they started $10 for per glass basis. And most of the people went to nightclub mainly on weekend (Friday Saturday), so after this policy less people will go on this nightclub but the supply or on the services provided for entertainment will not get be much affected by this pricing policy.

Rahul Sunny answered 1 year ago
Next > < Previous

Related Solutions

Apple adopted 4 pricing strategies Marketing skimming pricing value-based pricing product line pricing psychological pricing Question:...
Apple adopted 4 pricing strategies Marketing skimming pricing value-based pricing product line pricing psychological pricing Question: How these pricing strategies matches the positioning strategy of apple?
Apple adopted 4 pricing strategies Marketing skimming pricing value-based pricing product line pricing psychological pricing Question:...
Apple adopted 4 pricing strategies Marketing skimming pricing value-based pricing product line pricing psychological pricing Question: How these pricing strategies complement one another?
Apple adopted 4 pricing strategies Marketing skimming pricing value-based pricing product line pricing psychological pricing Question:...
Apple adopted 4 pricing strategies Marketing skimming pricing value-based pricing product line pricing psychological pricing Question: How these pricing strategies matches the positioning strategy of apple?
Exercise 4-14 Tim Mattke Company began operations in 2018 andfor simplicity reasons, adopted weighted-average pricing...
Exercise 4-14 Tim Mattke Company began operations in 2018 and for simplicity reasons, adopted weighted-average pricing for inventory. In 2020, in accordance with other companies in its industry, Tim Mattke changed its inventory pricing to FIFO. The pretax income data is reported below.YearWeighted-AverageFIFO2018$370,000$395,0002019390,000430,0002020410,000450,000Q1What is Tim Mattke’s net income in 2020? Assume a 20% tax rate in all years.Net IncomeQ2Compute the cumulative effect of the change in accounting principle from weighted-average to FIFO inventory pricing.Net effectQ3Show comparative income statements for Tim...
C3.          Assume that our company owns a subsidiary operating in Switzerland. The subsidiary has adopted the...
C3.          Assume that our company owns a subsidiary operating in Switzerland. The subsidiary has adopted the Swiss Franc (CHF) as its functional currency. Our company operates this subsidiary like a division or branch office, making all of its operating decisions, including pricing its products. We conclude, therefore, that the functional currency of this subsidiary is the $US and that its financial statements must be remeasured prior to consolidation. Following are the subsidiary’s financial statements (in CHF) for the most recent...
4. Assume that this economy – suppose it is China – has the following production function:...
4. Assume that this economy – suppose it is China – has the following production function: Y = F(K, L) = K0.5L0.5 a. State the per-worker production function. b. Suppose the saving rate is 24 percent, the depreciation rate is 6 percent and the population growth rate is 2 percent. Calculate the following three variables in the steady state: capital stock per worker, output per worker, and consumption per worker. c. Draw a graph for the Solow Model in the...
Feisty Fox Foundation is considering a project that has the following cash flow and WACC data....
Feisty Fox Foundation is considering a project that has the following cash flow and WACC data. What is the project's NPV? Compute to the second decimal place WACC:           11.85% After Tax Salvage Value at end of year 4 = $300                                           Year                            0                      1                      2                      3                      4 Cash flows         -$1,600                $450                $450                $450              $450
Assume that the Samsung Galaxy smartphone has become more popular, which has increased its demand and...
Assume that the Samsung Galaxy smartphone has become more popular, which has increased its demand and decreased the demand for iPhones at the Verizon store in Dallas. This has caused the annual quantity sold of the iPhone to fall from 800 to 512. Assume that the annual carrying cost per unit for holding an iPhone in inventory is $40 and the order fixed cost is $10. The economic order quantity for the iPhone is The average inventory of iPhones is...
Question 4 a) Critically evaluate various loan portfolio measures adopted by the following stakeholders to mitigate...
Question 4 a) Critically evaluate various loan portfolio measures adopted by the following stakeholders to mitigate against loan delinquency during COVID-19 Pandemic i. Central Bank 5 marks ii. Universal Banks 5 marks b) Discuss the various credit scheme that have been rolled out to rescue countries, businesses and individuals from the negative impact of COVID-19. 15 marks
Maintain inventory records Fire fox manufacturing has the following information in relation to commodity for July...
Maintain inventory records Fire fox manufacturing has the following information in relation to commodity for July inventory ................July1...................20 units at birr 50 Sales July 7.........10 units July 18.......... 10 units July 27...........10 units Purchase july 3..............20 units at birr 51 July 20 ................. 15 units at birr 52 Required Task 1: the company used perpetual inventory system and LIFO costing determine cost of goods sold and ending inventory Task 2: if the company used periodic inventory system and FIFO costing...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT