Understanding Markets, Industry Changes, and Sample Pricing
Notes for Writer: These Questions have alot to do with Simple Pricing, understanding Markets and Industry changes from the chapter in my book. Hello can you please explain in detail how you got the answers for Problems 1 & 2 so I can understand as well. Thank you.
Question #1
1) You are serving as the chair for your community’s annual wellness campaign. A key event is the annual Walk 3k, Run 10k, Ride 20k event. The event is staged entirely by volunteers and the goal is to attract community wide awareness of getting active as a key step to wellness. In other words, the goal is not to raise money, but to prompt awareness. As the chair you set a financial goal to breakeven on the one and only cost of the event, a fitness bag with the community seal and the event moto, “I AM ON THE RIGHT TRACK!
The cost of the bags, which must be ordered in batches of 100, are:
Bags Fixed Cost Variable Cost Total Cost Average Variable Cost Marginal Cost Total Revenue wt Price $15 Marginal Revenue
0 1700 0
100 1700 500
200 1700 1200
300 1700 2700
400 1700 5200
500 1700 9000
600 1700 15000
700 1700 23800
800 1700 36800
900 1700 55800
1000 1700 83000
a) Complete the table. If this was a profit-making activity, at the entry fee of $15, what would be the profit maximizing quantity of bags.
b) You will charge an entry fee of $15 per participant. Determine the breakeven quantity of bags.
Question#2
2) Your Best Brand Bike Shorts-BBB Shorts have been flying off the shelf. Your chief economist tells you that during the Covid-19 pandemic, the taste for bicycling has shifted. The demand curve is much more inelastic. The price elasticity of demand has decreased from:
-5.76 to -2.70.”
Before the campaign your price was $240 per pair of BBB Shorts. What should be the new price?
Hello can you put the answers along with the word problems in Microsoft word document and explain in detail so I can understand as well. Thank you
I believe For Question #1 is focusing on Calculating Marginal Revenue can you please explain how you got the answer as well. Thank you
Subject and Section
Professor’s Name
Date
Simple Pricing
Question 1. Community’s Annual Wellness Campaign
* Profit Maximizing Quantity
The complete table for the calculation is provided as above. In this case the only data that was initially provided was the quantity (‘bags’), fixed cost (FC), and the Variable Cost (VC). To find the Total Cost (TC), the Fixed Cost was added to the Variable Cost. This is illustrated in the following formula:
Total Cost (TC) = Fixed Cost (FC) + Variable Cost (VC)
In excel, this was answered with the use of the formula ‘=SUM(n1,n2)’. For example, when the quantity of bags is equal to zero (n=0), the TC was derived with the formula ‘=SUM(E4,F4)’.
After finding the TC for each item, the Marginal Cost (MC) was determined by dividing the change in cost with the change in quantity. Thus, the following formula was used:
Marginal Cost (MC) = (Cost2 – Cost1) / (Quantity1 – Quantity2)
In Excel this was taken by using the following formula ‘=(Cost2 – Cost1) / (Quantity2 – Quantity1)’. For example, when finding the MC when quantity of bags is two-hundred (n=200), the following formula was used ‘=(G6-G5)/(D6-D5)’.
In order to determine the Profit Maximizing Quantity, the value where Marginal Cost is equal to Marginal Revenue, which may be represented by the following formula:
Marginal Cos...
👀 Other Visitors are Viewing These APA Essay Samples:
-
Dialectical Journal on Environmental Economics
2 pages/≈550 words | 1 Source | MLA | Mathematics & Economics | Coursework |
-
Computing the Breakeven Quantity Level
2 pages/≈550 words | No Sources | MLA | Mathematics & Economics | Coursework |
-
Describing Trends and Analyzing Current Labor Conditions
2 pages/≈550 words | No Sources | MLA | Mathematics & Economics | Coursework |