Which pricing method is demonstrated by the following
statement?
"Alternative Pioneering Systems concluded that consumers would be
willing to pay approximately $100 for a food dehydrator. Based on
this price, the firm determined margins that would have to be
allowed for wholesalers and retailers."
a. Prestige pricing
b. Price lining
c. Skimming pricing
d. Target pricing
e. Above-, at-, or below market pricing
The answer for this problem is Option d. Please explain to me why other options are incorrect.
In: Finance
Break-Even Point
Sheridan Enterprises sells a product for $100 per unit. The variable cost is $47 per unit, while fixed costs are $977,532.
Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $105 per unit.
| a. Break-even point in sales units | units |
| b. Break-even point if the selling price were increased to $105 per unit | units |
In: Accounting
An industrial bakery agrees to supply one hundred thousand loaves of bread monthly to a major Canadian grocery chain at a price of $1.00 per loaf. Before deliveries begin, the baker rethinks the deal, feeling it should have charged more. On review, it discovers that the contract recites “one hundred” loaves of bread monthly at $1.00 per loaf. What recourse will the grocery chain have if the bakery refuses to honour its price beyond 100 loaves?
In: Operations Management
Consider a market with n ≥ 2 firms engaged in Cournot competition. The firms’ cost functions, and the market demand function are C(q)= 10q and D(p)= 100-p respectively
(a) Find the equilibrium quantity and price, the consumer surplus, and the prof- its of each firm.
(b) How much total surplus is lost due to market power?
(c) What happens to the equilibrium quantity, price, and dead-weight loss when the number of firms grows to infinity?
In: Economics
QUESTION 11
Chamiching makes hacksaw blades. Inventory values are determined
using the first in, first out (FIFO) method. Production and sales
data for the first three years appear below.
|
Hacksaw blades |
Sold |
Produced |
|
Yr 1 |
18,000 |
22,000 |
|
Yr 2 |
25,000 |
23,000 |
|
Yr 3 |
37,000 |
35,000 |
|
Sales price |
Full cost |
|
|
Yr 1 |
$10.00 |
$6.00 |
|
Yr 2 |
$11.00 |
$6.60 |
|
Yr 3 |
$12.00 |
$7.60 |
For Chamiching, which of the following is true?
In the first year, variable costs accounted for half of the full
costs. Total fixed production costs increased each subsequent year
by 20%, as a result of step-fixed costs and a general inflationary
price increase.
|
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|
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|
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|
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|
In: Accounting
As a manager of Children's Museum of Indianapolis, you face the
following monthly demand curve for its annual membership:
Qd= 1,000-4P
where Qd is the quantity demanded of annual memberships and P is
the unit-price of annual membership. The Following table derived
from the above demand function above shows how Qd and TR (total
Revenue) change with P
| P | Qd | TR |
| $50 | ||
| $75 | ||
| $100 | ||
| $125 | ||
| $150 | ||
| $175 | ||
| $200 |
a) Fill in the table
b) Suppose that the CEO of the museum wants to increase the
membership price from $125 to $150.
i) Use the midpoint method to calculate the price elasticity of
demand for the price increase. Is the demand elastic, unitary or
inelastic for the price change?
ii) What would be your recommendation to her?
c) Suppose the supply function is given as Qs= 4P
In: Economics
2. Alternative price indexes
Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator.
The GDP deflator for this year is calculated by dividing the _______ using _______ by the _______ using and multiplying by 100. However, the CPI reflects only the prices of all goods and services _______.
Indicate whether each scenario will affect the GDP deflator or the CPI for the United States. Check all that apply.
An increase in the price of a Chinese-made car that is popular among U.S. consumers.
A decrease in the price of a Treewood Equipment feller buncher, which is a commercial forestry machine made in the U.S but not bought by U.S. consumers.
In: Economics
Consider a competitive market served by many domestic and foreign firms. The domestic demand for these firms’ product is Qd = 700 - 1.5P. The supply function of the domestic firms is QSD = 50 + 0.5P, while that of the foreign firms is QSF = 200. Instructions: Enter your responses for equilibrium price rounded to the nearest penny (two decimal places). Enter your responses for equilibrium quantity rounded to one decimal place.
a. Determine the equilibrium price and quantity under free trade. Equilibrium price: $ Equilibrium quantity: units
b. Determine the equilibrium price and quantity when foreign firms are constrained by a 100-unit quota. Equilibrium price: $ Equilibrium quantity: units
c. Are domestic consumers better or worse off as a result of the quota?
d. Are domestic producers better or worse off as a result of the quota?
In: Economics
In: Economics
An agent chooses between two goods, x and y, with prices px and py, respectively. She has an income I and her preferences are represented by the utility function U (x, y) = lnx + y.
A. Suppose that I = 100, px = 2 and py=1. How much of good x and y will the agent choose?
B. If the price of good x rises to px=4, with income and the price of good y remaining the same, what quantities does he/she buy and what is his/her resulting utility? Illustrate graphically
C. Find the income and substitution effect for good x due to this price change. Illustrate graphically.
D. Find the compensating variation for the price change and illustrate graphically.
E. What is the equivalent variation of the price increase?
In: Economics