Get college assignment help at uniessay writers Pricing and Production Decisions at PoolVac, Inc. PoolVac, Inc. manufactures and sells a single product called the “Sting Ray,” which is a patent-protected automatic cleaning device for swimming pools. PoolVac’s Sting Ray accounts for 65 percent of total industry sales of automatic pool cleaners. Its closest competitor, Howard Industries, sells a competing pool cleaner that has captured about 18 percent of the market. Six other very small firms share the rest of the industry’s sales. Using the last 26 months of production and cost data, PoolVac wishes to estimate its unit variable costs using the following quadratic specification: 2= AVCabQcQ The monthly data on average variable cost (AVC), and the quantity of Sting Rays produced and sold each month (Q) are presented in the table below. PoolVac also wishes to use its sales data for the last 26 months to estimate demand for its Sting Ray. Demand for Sting Rays is specified to be a linear function of its price (P), average income for households in the U.S. that have swimming pools (Mavg), and the price of the competing pool cleaner sold by Howard Industries (PH): = davQdePfMgP g H The table below presents the last 26 months of data on the price charged for a Sting Ray (P), average income of households with pools (MAVG), and the price Howard Industries charged for its pool cleaner (PH): obs AVC Q P MAVG PH 1 109 1647 275 58000 175 2 118 1664 275 58000 175 3 121 1295 300 58000 200 4 102 1331 300 56300 200 5 121 1413 300 56300 200 6 102 1378 300 56300 200 7 105 1371 300 57850 200 8 101 1312 300 57850 200 9 108 1301 325 57850 250 10 113 854 350 57600 250 11 114 963 350 57600 250 12 105 1238 325 57600 225 13 107 1076 325 58250 225 14 104 1092 325 58250 225 15 104 1222 325 58250 225 16 102 1308 325 58985 250 17 116 1259 325 58985 250 18 126 711 375 58985 250 19 116 1118 350 59600 250 20 139 91 475 59600 375 21 152 137 475 59600 375 22 116 857 375 60800 250 23 127 1003 350 60800 250 24 123 1328 320 60800 220 25 104 1376 320 62350 220 26 114 1219 320 62350 220 1 PoolVac, Inc. incurs total fixed costs of $45,000 per month. 1. a. Run the appropriate regression to estimate the average variable cost function (AVC) for Sting Rays. Evaluate the statistical significance of the three estimated parameters using a significance level of 5 percent. Be sure to comment on the algebraic signs of the three parameter estimates. b. Using the regression results from part 1 a, write the estimated total variable cost, average variable cost, and marginal cost functions (TVC, AVC, and MC) for PoolVac. TVC = __________________________________________ AVC = __________________________________________ MC = ___________________________________________ c. Compute minimum average variable cost. Qmin = ___________ AVCmin = ______________ 2. a. Run the appropriate regression to estimate the demand function for Sting Rays. Evaluate the statistical significance of the three estimated slope parameters using a significance level of 5 percent. Discuss the appropriateness of the algebraic signs of each of the three slope parameter estimates. 2 3 b. The manager at PoolVac, Inc. believes Howard Industries is going to price its automatic pool cleaner at $250, and average household income in the U.S. is expected to be $65,000. Using the regression results from part 2 a, write the estimated demand function, inverse demand function, and marginal revenue function. Demand: ____________________________ Inverse Demand: ____________________________ Marginal Revenue: ____________________________ 3. Using your estimated cost and demand functions from parts 1 and 2, what price would you recommend the manager of PoolVac, Inc. charge for its Sting Ray? Given your recommended price, estimate the number of units PoolVac can expect to sell, as well as its monthly total revenue, total cost, and profit. P: ___________ Q: ___________ TR: ___________ TC: ___________ Profit: ___________ 4. For the profit-maximizing solution in question 3, compute the point elasticity of demand for Sting Rays. E = ______________ In the profit-maximizing situation in question 3, a 5 percent price cut would be predicted to _______________ (increase, decrease) quantity demanded of Sting Rays by ___________ percent, which would cause total revenue to _____________ (rise, fall, stay the same) and profit to _____________ (rise, fall, stay the same). 5. For the profit-maximizing solution in question 3, compute the income elasticity of demand for Sting Rays. EM = ______________ a. Is the algebraic sign of the income elasticity as you expected? Explain. b. A 10 percent increase in Mavg would be predicted to _______________ (increase, decrease) quantity demanded of Sting Rays by ___________ percent. 4 6. For the profit-maximizing solution in question 3, compute the cross-price elasticity of demand for Sting Rays. EXR = ______________ a. Is the algebraic sign of the income elasticity as you expected? Explain. b. A 3 percent decrease in PH would be predicted to _______________ (increase, decrease) quantity demanded of Sting Rays by ___________ percent. 7. If total fixed costs increase from $45,000 to $55,000, what price would you now recommend in order to maximize profits at PoolVac? Compute the number of units sold at this price, total revenue, total cost and profit: P: ___________ Q: ___________ TR: ___________ TC: ___________ Profit: ___________ 8. If the manager of PoolVac wanted to maximize total revenue instead of profit (a bad idea), the manager would charge a price of $_____________. At this price, PoolVac’s profit would be $_______________, which is _______________ (higher than, lower than, the same as) the profit in question 3.
“5. Japan primarily exports manufactured goods, while importing raw materials such as food and oil. Analyze the impact on Japan’s terms of trade of the following events: (10 points) a. A war in the Middle East disrupts oil supply. b. Korea develops the ability to produce automobiles that it can sell in canada and the U.S. c. A reduction in japan’s tariffs on imported beef and citrus fruit *Not really any word limit, just enough to answer the questions. maybe a couple of sentences each? Thanks!*
Total Revenue= (QxP)-FC-TVC At Q=2000, TR= 15000 At Q=4000, TR = 33000 At Q= 6000, TR= 22000 At Q= 8000, TR= -13000 At Q= 10000, TR= -60000 a) The producer will produced at Q=4000 to earn the highest level of revenue.
0901. Explain and illustrate, using appropriate diagrams, the difference between an inferior good and a Giffen good.
0903. Briefly outline the ethical features and criticisms of utilitarianism.
0902(b) When prices are ($2, $10), Emil chooses the bundle (1, 6), and when prices are ($12, $4), he chooses the bundle (7, 2). Is Emil’s choice of bundles consistent with the Weak Axiom of Revealed Preference?
A Paper Company produces 1 million euros worth of paper and sells it to a book publisher, which prints 100,000 copies of an economics textbook for which it paid an economics professor 500,000 euros to write. The publisher sold the textbooks to university bookstores nationwide for 3 million euros. The university bookstores received 4 million euros from students in exchange for the books. 3.1. What is the total contribution to GDP from the above events?
3. The amount of fish caught per week on a trawler is a function of the crew size assigned to operate the boat. Based on past data, the following production schedule was developed: a. Over what ranges of workers are there (i) increasing, (ii) constant, (iii) decreasing, and (iv) negative returns?
Of the following countries, the one that best exhibits the characteristics of a market economy is:
Robert Frank, writing for the Wall Street Journal (9-30-10), speculates on whether the wealthy or non-wealthy work harder. An excerpt from the story: “British billionaire Richard Branson is quoted today as saying that the wealthy don’t work harder than everyone else – they are just fortunate. “Yes, entreprenuers may work hard, but I don’t think they actually work any harder than, say, doctors, nurses or other people in society, and yet tremendous wealth comes with it and therefore enormous responsibility comes with that wealth, responsibility to do good things, maybe create new businesses and maybe tackle some of the more seemingly intractable problems in the world..” He may be right. But studies on the comparative work habits of the wealthy tell a different story. Research by professors Mark Aguiar and Erik Hurst combined the results of several large surveys (including studies where randomly chosen subjects kept detailed time diaries), and found that the working time for upper-income professionals has increased compared with 1965, while total annual working time for low-skill, low-income workers has decreased.” Question: based solely on the above, can you explain which individual – the wealthy person or the low-skilled worker – has a higher reservation wage?
Get college assignment help at uniessay writers Before the airline industry was deregulated, the Airline Pilots Association (ALPA) was generally regarded as one of the most successful unions in raising wages of its members; the International Ladies Garment Workers Union (ILGWU), on the other hand, had only limited success in raising wages. a) Use at least one of the four Marshall-Hicks laws of derived demand to explain this difference in effectiveness between the unions. b) After deregulation of the airline industry, over 40 new airlines began business. What was the likely effect of this on the elasticity of demand for airline pilots? Explain.
a) One 1980s-era estimate of the effects of a youth subminimum wage on adult employment is that for every 100 teenagers employed, between 11 and 33 adult workers would be displaced. (i) According to this finding, are adult and teenage workers gross complements or gross substitutes? (ii) Would the cross-wage elasticity between teenagers and adults have a positive or negative sign? Explain. (b)Suppose the price of capital increases relative to the wage rate and, as a result, the demand for labor falls. (i) Are these inputs gross substitutes or gross complements? (ii) What can you infer about the relative strengths of the output and substitution effects?
ABC Company is currently ahving 1000 Suits at a price of Rs. 500/- per suit total cost is Rs. 4,50,000 representing fixed cost. Your average variable cost is constant. The company aims at achieving maximum profit. The marketing manager of the company believes that if the comapny could reduce the price to Rs.200 per and raise the sales by icnrease 20%. In contrast the consultant of the company argues taht a 20% reduction in current price would bring 60% increase in sale. A) If you were the MD of ABC company abd if you totally satsified by the demand estimates by the Marketing manager, would you reduce the price to Rs. 400/- If so why? B) If instead of agreeing with demand estimates the marketing manager, you agree with that of the consultant other things remaining the same above. Would you entertain price reduction if so why?
Waht are the four key points of international trade?
Define the terms listed below. You should write a paragraph explaining each concept as if you were writing for your 15-year-old sibling (or a high school textbook). Fiscal Policy The Multiplier Effect Full Employment Automatic Stabilizers
The invisible hand’s ability to coordinate the decisions of the firms and households in the economy can be hindered by
Hi, I want you to answer these questions. and for the graph it is simple just draw the correct one. Thanks, Elment Elment66@yahoo.com
(Key Question) Use the following data to calculate (a) the size of the labor force and (b) the official unemployment rate: total population, 1000; population under 16 years of age or institutionalized, 120; not in labor force, 150; unemployed, 73; part-time workers looking for full-time jobs, 12.
Assume that the officials in Ecoland have complied the following information about their economy for last year: y= 10,000 c=6,000 t= 1,500 g= 1,700 the government uses the following equation for the investment function: I=3,300 – 100r where r= equal to Ecoland’s real interest rate calculate, then explain, the following: private saving Public Saving National Saving Investment the equilibrium real interest rate
if accounting profit is $400000 greater than economic profit, what do implicit costs equal?
Your question: “Farmers (landowners) are good stewards of the soil. The only thing EPA needs to be concerned about is the off-site costs of soil erosion which do not enter the farmers” decision calculus.” A. Do farmers (landowners) have an incentive to maintain the productivity of their land over time? Why? B. Would a farmer (landowner) ever have an economic incentive to let her soil erode away and not protect future productivity? When? Why? C. If the farmer rented her land from a landowner,would she have the same incentives to control soil erosion? Would the landowner have an incentive to control erosion?
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