Determine the optimum price and quantity at which the company profits would be maximized. (b) Describe the limitations of using the model in (a) above. Formulae: Demand curve P = a – bQ a = price when Q = 0 b = change in price change in quantity
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Zonakha Limited specialises in the production of a range of healthy products. It is about to launch a new product, the ‘Healthy Energy Bar’, a unique green bar which is capable of providing unprecedented levels of energy from the seaweed used. The company’s development costs have been high and it is expected that the product will only have a five-year life cycle.
Zonakha Limited is now trying to ascertain the best pricing policy that they should adopt for the Energy Bar’s launch onto the market.
The costs of producing each energy bar is R13,00:
Required:
(a) Determine the optimum price and quantity at which the company profits would be
maximized.
(b) Describe the limitations of using the model in (a) above.
Formulae:
Demand curve P = a – bQ a = price when Q = 0
b = change in price change in quantity
MR = a – 2bQ
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- According to International Data Corporation (IDC), the number of worldwide smartphone owners will soon exceed 3 billion. That number is expected to grow at nearly 10 percent per year for the next five years. While the actual cost of a smartphone is about $300, wireless carriers in many countries offer their customers a "free" smartphone with a two-year wireless service agreement. This pricing strategy is consistent with which of the following: Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click twice to empty the box. Two-part pricing Bundling Cross subsidization Second-degree price discriminationA big data firm Statqo Analytics report shows that Gojek had experienced a 14 percent downturn during the pandemic. Therefore Gojek has a plan to provide special promotions for its customers. However, Gojek still needs to consider its competitor, Grab, before deciding. Based on Gojek’s board of directors calculation, if neither Gojek nor Grab offers discount pricing, a profit of US $2.5 million will be earned by Gojek, and US $2 million will be earned by Grab. However, if Gojek is the only one to offer a discount, it will earn US $5million, while Grab profits will fall to US$ 3 million. If Grab offers a discount and Gojek continues to charge the regular price, Grab profits will total US $3.5 million while Gojek monthly profits fall to US$1.5 million. Finally, if For both Gojek and Grab are to offer discount prices, thereby they will get a modest profit of US $4 million and US $2.5 million, respectively a. Develop a normal-form game of the situation by filling up the table bellow…CITGO, the petroleum company owned by the Venezuelan government, sells its products throughout the world. Do you anticipate that its market positioning and advertising differ in different countries? Why or why not?
- List the factors that influence pricing decisions,and explain break-even analysisTastee Foods is a manufacturer of snack food items such as cereal bars, crackers, chips, and pretzels, and its products are carried by nearly all grocery stores and supermarkets across the United States. Tastee Foods has been quite successful domestically and is now ready to step foot into the international business arena, specifically, the expansive Chinese consumer market. Company executives are currently meeting to discuss the best avenue by which the company should enter the market.Which of the following, if true, weakens the argument for expanding into the Chinese market? Which of the following, if true, weakens the argument for expanding into the Chinese market? A) Setting up operations in China would take time and would require hard work and clever negotiating. B) Several companies have ventured into China and been largely unsuccessful because of their failure to meet the needs of the people. C) The majority of Chinese citizens prefer to snack on such traditional…dentify the four alternatives for handlingtransportation costs in pricing policies.
- Abercrombie Inc. is currently selling a consumer good and faces two related decisions, one with respect to pricing and the other with respect to marketing. With respect to pricing, it can maintain its "standard" price or it can adopt a lower "discount" price. With respect to marketing, it can keep with its current advertising campaign or it can expand its advertising. The main risk facing the firm concerns the course of the economy in the near-term; whether the economy will continue healthy growth or whether it will experience a recession. The table below shows the firm's possible profit results (in $ millions) depending on its price and advertising actions. Finally, the firm judges that there is a 60% chance of growth and a 40% chance of a recession. Standard P + Level ads Discount P + Level ads Standard P+ Increased ads Discount P + Increased ads Growing economy 25 15 30 20 Recession -20 0 -45 -10 (1) Determine the alternative maximizing its expected profit if Abercrombie must make…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 Determine the equation of the demand curve for beans
- 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…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.The Acmeville Metropolitan Bus Service currently charges $0.77 for an all-day ticket, and is used by an average of 588 riders a day. The bus company is not earning a profit, but according to their contract with the city, they cannot cut the number of buses on the road. They must therefore find a way to increase revenues. The bus company is considering increasing the ticket price to $0.88. The marketing department\'s studies indicate this price increase would reduce usage to 337 riders per day. Calculate the price elasticity of demand for bus tickets to determine if the bus company should increase price or decrease price to increase revenues.