After coming up with an innovative idea for a new product, you paid $4000 to an industrial designer to draw the blueprints and found a factory in China that agreed to produce the product for you for $3 per unit (the price includes the shipping cost from China to you).
Since this is a totally new and unique product, you have no idea how the demand for it would be. Therefore, before you start pricing the product and ordering large amounts from the Chinese factory, you decide to run an experiment (or a pilot study): you talk to Target and they allow you to sell your product at 11 different Target stores for 11 different prices (a different price at each store). These stores are located in areas whose residents have similar average income, so you can be certain that price (and not income) is the only factor varying among these stores.
After 2 weeks, Target sends you the sale numbers for your product. (use the following data).
Price Quantity Demanded
4 221
5 210
6 185
7 162
8 144
9 122
10 102
11 81
12 61
13 46
14 25
Does that mean your product is elastic
or inelastic at that price? (1pt)
To increase your revenue, should you set the price above or below
$7.5? (2pt)
Competitor |
|||
Advertise |
Do not advertise |
||
Your firm |
Advertise |
2000, 1500 |
2800, 700 |
Do not advertise |
900, 2100 |
2600, 1800 |
What is the Nash equilibrium of this
game? (3pts)
If you and your competitor could talk on the phone (imagine it was
legal to do so) to coordinate whether to advertise or not, what
would the outcome be? (2pts)
As per HOMEWORKLIB RULES first four subparts are answered below
Kindly ask rest of the questions in a separate post
After coming up with an innovative idea for a new product, you paid $4000 to an industrial design...
After coming up with an innovative idea for a new product, you paid $2000 to an industrial designer to draw the blueprints and found a factory in China that agreed to produce the product for you for $3.5 per unit (the price includes the shipping cost from China to you). Since this is a totally new and unique product, you have no idea how the demand for it would be. Therefore, before you start pricing the product and ordering large...
After coming up with an innovative idea for a new product, you paid $4000 to an industrial designer to draw the blueprints and found a factory in China that agreed to produce the product for you for $3 per unit (the price includes the shipping cost from China to you). Since this is a totally new and unique product, you have no idea how the demand for it would be. Therefore, before you start pricing the product and ordering large...
After coming up with an innovative idea for a new product, you paid $2000 to an industrial designer to draw the blueprints and found a factory in China that agreed to produce the product for you for $3.5 per unit (the price includes the shipping cost from China to you). Since this is a totally new and unique product, you have no idea how the demand for it would be. Therefore, before you start pricing the product and ordering large...
Description After coming up with an innovative idea for a new product, you paid $2000 to an industrial designer to draw the blueprints and found a factory in China that agreed to produce the product for you for $3.5 per unit (the price includes the shipping cost from China to you). Since this is a totally new and unique product, you have no idea how the demand for it would be. Therefore, before you start pricing the product and ordering...
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Borrow a pen if you r do the not graph have and one. to answer questions Question 1: (15 points) b Dupply: S bel c) Equilibrium price: Pi d) Equiibrium quantity: Q Use the data in the table below to construct a properly labeled graph for Product A showing: (make the graph large enough to add new lines) a) Supply: Si b) Demand: Di (5 points for this part of the graph) PriceQuantity Demanded Quantity Supplied $ 1 $ 2...
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