The table below reports the market demand schedule of Coca Cola and Pepsi.

1. Calculate the elasticity of demand for Coca Cola when its price increases from MYR 4 to MYR 5. Is the demand elastic, inelastic or unit elastic at this price range? Briefly explain.

2. If the demand for Coca Cola is inelastic, what would happen to the total revenue if price increases? Briefly explain.

3. Find the cross price elasticity between Coca Cola and Pepsi when the price of Coca Cola increases from MYR 2 to MYR 3.

4. What can you say about these two goods? Are they substitute or complement? Briefly explain.

Given a call warrant, with a strike price $112, the conversion ratio is 20, price of the call warran is $0.28 per warrant today, delta of the call warrant is 65%.

Given a put warrant, with a strike price $112, the conversion ratio is 20, price of the put warrant is $0.21 per warrant today delta of the put warrant is 55%.

Suppose the spot price of the underlying stock be $110.

A.Suppose you buy 4000 units of the call warrant today, and also buy 4000 units of the put warrant today, draw a diagram to indicate the profit/loss of your portfolio at expiry. Under what circumstances, investors should adopt this investment strategy?

B.Suppose you buy 100 shares of the stock at the spot price, and also buy 2000 units of the put warrant today, draw a diagram to indicate the profit/loss of your portfolio at expiry. Discuss the main advantages of this investment strategy.

Consider again Worked-Out Problem 14.2. The daily demand for pizza is

          Qd=32,900−600P,Qd=32,900−600P,

where P is the price of a pizza. The daily costs for a pizza company include $845 in avoidable fixed costs and variable costs equal to

          VC=5Q+Q2/80,VC=5Q+Q2/80,

where Q is the number of pizzas produced each day. Marginal cost when producing Q pizzas is

          MC=5+Q/40.MC=5+Q/40.

Recall that the price is $11.50, and the total quantity demanded is 26,000 pizzas per day. In a long-run equilibrium, each active firm produces 260 pizzas per day, its efficient scale. That means there are 100 active firms in the initial long-run equilibrium. Suppose that starting at the initial long-run equilibrium with a price of $11.50 and 100 active firms, the government requires firms to pay a tax of $11.50 per pizza.

a. Complete the table below.

Instructions: Round quantities to the nearest whole number and prices to 2 decimal places.

b. In the long run, the equilibrium price will be $ and the quantity will be .   

c. Relative to the short-run equilibrium, deadweight loss:

Forward prices of a generic asset The purpose of these problem is to guide you and introduce you the “no-arbitrage” condition required to compute forward prices. For the following problems, assume the following information: There is an asset A. The price of the asset today, denoted by ?0, is ?0 = $100. The CCIR (yearly)(continuously compounded interest rate) is 6%.

Problem 3: No storage cost, and a convenience yield. Assume that asset A has no storage cost and there is a convenience yield. Every 9 months, the holder of the asset receives $13 dollars (you can call that a dividend). Suppose that someone is willing to enter a forward contract of Asset A for delivery in one year from now at ?0,1 = $115

a. We don't know a priori if there is a mispricing. Compute an arbitrage portfolio to exploit the potential mispricing. Hint: start by borrowing today $100

b. Now suppose that someone is willing to enter a forward contract of Asset A for delivery in one year from now at ?0,1 = $80 . Compute an arbitrage portfolio to exploit the potential mispricing. Hint: start by short-selling the asset

c. What would be the forward price that makes the profit in a) and b) zero?

d. Now try to find the general pricing formula. Suppose that the rate is ?, the spot price is ?0 and someone is willing to enter a forward at a forward price of ?0,? for delivery at time t=T. Replicate your portfolio/strategy in a) using this new information. What is the no-arbitrage forward price? Assume that a dividend $? is paid at ?1,?2,?3, … ,?? < T

A symphony orchestra is preparing to stage a short concert series. The first program in the series consists of music by Berlioz and Tchaikovsky, while the second program comprises music by Bartok and Stravinsky. The potential audience for the series can be thought of as divided into four,equal-sized groups. Members of the first group, whose tastes tend to the romantic, would be willing to pay up to $40 for a ticket to the first concert and up to $20 for a ticket to the second concert.Members of the second group, whose tastes tend more to the neo-classical, have the opposite preference: they would pay up to $20 for a ticket to the first concert and up to $40 for a ticket to the second concert. Members of the third group, confirmed Tchaikovsky lovers, would pay as much as$45 for a ticket to the first concert, but only $5 for a ticket to the second concert. Finally, members of the fourth group, who pride themselves on their sophisticated taste, would pay as much as $45 for a ticket to the second concert, but only $5 for a ticket to the first concert. This information is summarized in Table 2

While answering these questions, please clearly state your assumptions (if any) and your justification for those assumptions.

1. What is the best price to charge for each concert if you are not offering a single ticket for the concert series?
2. What is the best price to charge for the concert series if you are not offering tickets for each concert separately?
3. Now suppose you offer a single ticket for the concert series in addition to offering tickets for each concert separately. What prices will you charge for the series and each concert?
4. Now consider the case titled "Multiproduct Pricing"? What is the best price to sell each product individually? Can the company do better by bundling?

In 1999, Karl Christe synthesized and characterized a salt that contained the N5+ cation, in which the five N atoms are connected in a long chain. This cation is the first all-nitrogen species to be isolated in more than 100 years. Draw all the possible Lewis structures for this ion. Calculate the formal charges on all atoms for each resonance structure and determine which is the most important.

The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2020, the first month of operation.

Production: 7,000 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs.

Manufacturing costs: Materials $33,000; labor $21,000; overhead $36,000.

Prepare a production cost report.

. Without using R find the median and the first quartile of the following data taken from a random sample of systolic blood pressures of patients measured in mmHg. What is the interquartile range?

88, 88, 92, 96, 96, 100, 102,102,104,104,105,105,105,107,107,108,110,110,110,111,111, 112,113,114, 114,115,115,116,116,117,117,117, 118,119,120,121,121, 121,121,121,121,122,122,123,123, 123, 123,123,124,124,124,124,125,125,125,126,126,126,126, 124, 125,125,125,126,126,126,126,131,133,134,135,136,136,136,138,138,139,139,141,142,142, 143,144,146,147,155,156.

Create a histogram of these data. What is the mode of the data?

The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2020, the first month of operation.

Production: 6,760 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs.

Manufacturing costs: Materials $37,088; labor $20,800; overhead $40,656.

Prepare a production cost report.