You are the owner of a Mom and Pop store that buys milk from a supplier at a cost of $1 per gallon. If you estimate the elasticity of demand for milk sold at your store to be –3.5, what are your profit-maximizing markup and price?
You are the owner of a Mom and Pop store that buys milk from a supplier...
Suppose that a grocery store buys milk for $2.10 and sells it for $2.60. If the milk gets old then the grocery store can sell their unsold milk back to their wholesaler for $0.60 (so the grocery store loses $1.50 on each gallon that it has to sell back to the wholesaler). Suppose that the demand for milk is normally distributed with a mean of 2,384 gallons per week and a standard deviation of 431 gallons per week. The grocery...
Suppose that a grocery store buys milk for $2.10 and sells it for $2.60. If the milk gets old then the grocery store can sell their unsold milk back to their wholesaler for $0.60 (so the grocery store loses $1.50 on each gallon that it has to sell back to the wholesaler). Suppose that the demand for milk is normally distributed with a mean of 2,055 gallons per week and a standard deviation of 481 gallons per week. The grocery...
A store buys a product from a supplier for $572 per unit and sells it in the store. The store has a yearly fixed cost of $63615. The product demand is estimated to be 958 units per year. The store has an income tax rate of 31%. Find the unit selling price if the store would like to have a yearly after-tax income of $54837.
You are manager of a souvenir store in New York City that sells, among other things, post cards. You buy the post cards from a supplier at $0.10 per card. If you believe the elasticity of demand for post cards for customers at your store is -2, then you profit-maximizing price is $0.30 $0.13 $0.20 $0.15
A convenience store buys 1-gallon jugs of milk for $2.99 and sells them for $4.29. What is the % margin they earn on the milk?
Grace is the owner-operator of the only supplier of artificial turf (fake grass) in a small town. Market demand is given by Q = 12,000 – 100p and marginal revenue is given by MR = 120 -0.02Q. Quantity is measured in square yards and price is measured in dollars per square yard. Grace's cost structure includes the following: Total Cost: C = 250,000 + 200 Marginal Cost: MC = 20 Average Cost: AC 250,000 Q + 20 (a) Calculate the...
Do you care whether a 15c tax per gallon of milk is collected from milk producers or from consumers at the store? Why? As a consumer, you O A. do not care how the tax is applied because the after-tax price will be the same. O B. do not care how the tax is applied because consumer incidence is always zero. O C. do not care how the tax is applied because consumer incidence is only determined by the elasticity...
A grocery store manager must decide how to best present a limited supply of milk and cookies to its customers. Milk can be sold by itself for a profit of $1.50 per gallon. Cookies can likewise be sold at a profit of $2.50 per dozen. To increase appeal to customers, one gallon of milk and a dozen cookies can be packaged together and sold for a profit of $3.00 per bundle. The manager has at most 100 gallons of milk...
The owner of a produce store found that when the price of a head of lettuce was raised from 50 cents to $1, the quantity sold per hour fell from 18 to 8. The arc elasticity of demand for lettuce is A) -0.56. B) -1.15. C) -0.8. D) -1.57 Can you please show step by step how you solve this?
The Sound Shop buys a popular programmable telephone from a supplier for $12.19. If the desired markup of cost on the telephone is 35 percent, the retail price should be: 1.34.83 2.18.75 3.16.46 4.20.11