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You are the manager of Zokia Ghana Limited, a producer of beans. In Ghana, it is possible to produce
beans or groundnut using the same resources. Therefore, producers are able to sw itch from beans to groundnut production depending on market conditions. Consequently, Zokia consulted an Economist who estimated the demand function for beans as: Qbd = 600 – 4Pb – 0.03M – 12Pg + 15T + 6Pe + 1.5N
where Qbd is the quantity demanded of beans each month, ?? is the average price of beans (in
Ghana Cedis), M is the average household income (in GH¢), ?? is the price of groundnut (in GH¢), T is a consumer taste index ranging in value from 0 to 10 (the highest rating), ?? is the price (in GH¢) consumers expect to pay next month for beans, and N is the number of buyers in the market for beans. Assume the following initial values: ??=5, ??= 40, T= 6.5, Pe= 5.25, N= 2000, Qbd = 2479
Determine the equation of the demand curve for beans
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- You are the manager of Zokia Ghana Limited, a producer of beans. In Ghana, it is possible to produce beans or groundnut using the same resources. Therefore, producers are able to sw itch from beans to groundnut production depending on market conditions. Consequently, Zokia consulted an Economist who estimated the demand function for beans as: Qbd = 600 – 4Pb – 0.03M – 12Pg + 15T + 6Pe + 1.5N where Qbd is the quantity demanded of beans each month, ?? is the average price of beans (in Ghana Cedis), M is the average household income (in GH¢), ?? is the price of groundnut (in GH¢), T is a consumer taste index ranging in value from 0 to 10 (the highest rating), ?? is the price (in GH¢) consumers expect to pay next month for beans, and N is the number of buyers in the market for beans. Assume the following initial values: ??=5, ??= 40, T= 6.5, Pe= 5.25, N= 2000, Qbd = 2479 Explain to your Board of Directors why management should be worried about a rise in the price of groundnut.You are the manager of Zokia Ghana Limited, a producer of beans. In Ghana, it is possible to produce beans or groundnut using the same resources. Therefore, producers are able to sw itch from beans to groundnut production depending on market conditions. Consequently, Zokia consulted an Economist who estimated the demand function for beans as: Qbd = 600 – 4Pb – 0.03M – 12Pg + 15T + 6Pe + 1.5N where Qbd is the quantity demanded of beans each month, ?? is the average price of beans (in Ghana Cedis), M is the average household income (in GH¢), ?? is the price of groundnut (in GH¢), T is a consumer taste index ranging in value from 0 to 10 (the highest rating), ?? is the price (in GH¢) consumers expect to pay next month for beans, and N is the number of buyers in the market for beans. Assume the following initial values: ??=5, ??= 40, T= 6.5, Pe= 5.25, N= 2000, Qbd = 2479 As a result of the effect of COVID-19 on the economy, the government has proposed an income cut policy. Labour unions…Bubble tea is one of Malaysia's most popular beverages, especially among young working adults and students. With demand currently on a downward turn due to the effects of national Covid-19 measures, it was not long ago a huge craze that began sweeping Malaysians in 2018, resulting in an explosion of bubble tea shops and franchises across the country. In early 2020, the demand for a cup of Bubble Tea in Malaysia is given by the equation Qd = 500,000 - 45,000P. At a price of $5.00 per cup (USD price), what is the price elasticity of demand PED? O a. -0.818 O b. 1.10 O c. 0.818 O d. -1.10
- You are the manager of Zokia Ghana Limited, a producer of beans. In Ghana, it is possible to produce beans or groundnut using the same resources. Therefore, producers are able to sw itch from beans to groundnut production depending on market conditions. Consequently, Zokia consulted an Economist who estimated the demand function for beans as: Qbd = 600 – 4Pb – 0.03M – 12Pg + 15T + 6Pe + 1.5N where Qbd is the quantity demanded of beans each month, ?? is the average price of beans (in Ghana Cedis), M is the average household income (in GH¢), ?? is the price of groundnut (in GH¢), T is a consumer taste index ranging in value from 0 to 10 (the highest rating), ?? is the price (in GH¢) consumers expect to pay next month for beans, and N is the number of buyers in the market for beans. Assume the following initial values: ??=5, ??= 40, T= 6.5, Pe= 5.25, N= 2000, Qbd = 2479 Using the concept of own price elasticity, advise management on price change in order to increase revenue.An exporter of handbags has just entered a new market. This exporter faces the following relationship between the price of handbags and the demand for them: P=15+ 4.800 D 2.500 D² , D>0 where P is the price per unit and D is the demand per month. The exporter wants to maximize his profit. The fixed cost is $2055 per month and the variable cost #33 per unit. How many handbags should be produced and sold each month, in order to maximize profit? Round your answer to 0 decimal places.You are the owner of QuantCrunch Corporation, a company that recently spent $15,000 to develop a statistical software package. To date, you only have one client. A recent internal study revealed that this client’s demand for your software is Qd = 300 – 0.2P and that it would cost you $1,000 per unit to install and maintain software at this client’s site. Your assignment is to construct a report that compares (1) the profit that results from charging this client a single (profit-maximizing) per-unit price with (2) the profit that results from charging $1,450 for the first 10 units and $1,225 for each additional unit of software purchased. Answer the following questions in your report: What type of pricing strategy is (1)? What type of pricing strategy is (2)? Compare at least three strategies discussed in this module (including 1 and 2) in making your recommendation? Show your calculations.
- 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 - 0.02 x Demand for an annual printing of this particular product. The fixed costs per year (ie., per printing) = $46,000 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 3,000 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. (Round to the nearest cent.) Enter your answer in each of the answer boxes.An analyst for FoodMax estimates that the demand for its Brand X potato chips is given by ln QdX = 12.14 – 2.8 ln PX + 3.4PY + 0.7 ln AX, where Qx and PX are the respective quantity and price of a four-ounce bag of Brand X potato chips, PY is the price of a six-ounce bag sold by its only competitor, and AX is FoodMax’s level of advertising on Brand X potato chips. Last year, FoodMax sold 7 million bags of Brand X chips and spent $0.42 million on advertising. Its plant lease is $2.1 million (this annual contract includes utilities) and its depreciation charge for capital equipment was $2.8 million; payments to employees (all of whom earn annual salaries) were $0.8 million. The only other costs associated with manufacturing and distributing Brand X chips are the costs of raw potatoes, peanut oil, and bags; last year FoodMax spent $2.8 million on these items, which were purchased in competitive input markets. Based on this information, what is the profit-maximizing price for a bag of…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..
- 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?The Vista TV Cable Co. currently has 100,000 subscribers who are each paying a monthly rate of $40. A survey reveals that there will be 1000 more subscribers for each $0.25 decrease in the rate. At what rate will maximum revenue be obtained, and how many subscribers will there be at this rate?An exporter of handbags has just entered a new market. This exporter faces the following relationship between the price of handbags and the demand for them: 4,800 3,000 P= 5+- D>0 D2 where P is the price per unit and D is the demand per month. The exporter wants to maximize his profit. The fixed cost is P2,000 per month and the variable cost P35 per unit. How many handbags should be produced and sold each month, in order to maximize profit? Blank 1 units