case assignment week 7 | Economics homework help

 

Case Assignment week 7

Webster University BUSN 6021

 

1. You are the owner of a local Honda dealership. Unlike other dealerships in thearea, you take pride in your “no-haggle” sales policy. Last year, your dealer-ship earned record profits of $1.5 million. In your market, you competeagainst two other dealers, and the market-level price elasticity of demand for midsized Honda automobiles is –1.3. In each of the last five years, your dealership has sold more midsized automobiles than any other Honda dealershipin the nation. This entitled your dealership to an additional 30 percent off themanufacturer’s suggested retail price (MSRP) in each year. Taking this intoaccount, your marginal cost of a midsized automobile is $12,000. What priceshould you charge for a midsized automobile if you expect to maintain yourrecord profits?

 

2.The American Baker’s Association reports that annual sales of bakery goodslast year rose 15 percent, driven by a 50 percent increase in the demand forbran muffins. Most of the increase was attributed to a report that diets rich inbran help prevent certain types of cancer. You are the manager of a bakery thatproduces and packages gourmet bran muffins, and you currently sell branmuffins in packages of three. However, as a result of this new report, a typicalconsumer’s inverse demand for your bran muffins is now   P  = 8 – 1.5  Q  . If yourcost of producing bran muffins is   C   (  Q  ) = 0.5  Q  , determine the optimal numberof bran muffins to sell in a single package and the optimal package price.

 

3. Arisk-neutral consumer is deciding whether to purchase a homogeneousproduct from one of two firms. One firm produces an unreliable product andthe other a reliable product. At the time of the sale, the consumer is unable todistinguish between the two firms’products. From the consumer’s perspective, there is an equal chance that a given firm’s product is reliable or unreliable. The maximum amount this consumer will pay for an unreliable productis $0, while she will pay $100 for a reliable product. 

a. Given this uncertainty, what is the most this consumer will pay to purchaseone unit of this product? 

b. How much will this consumer be willing to pay for the product if the firmoffering the reliable product includes a warranty that will protect the consumer? Explain.

 

 

4. BK Books is an online book retailer that also has 10,000 “bricks and mortar”outlets worldwide. You are a risk-neutral manager within the CorporateFinance Division and are in dire need of a new financial analyst. You onlyinterview students from the top MBAprograms in your area. Thanks to yourscreening mechanisms and contacts, the students you interview ultimately differ only with respect to the wage that they are willing to accept. About 10 percent of acceptable candidates are willing to accept a salary of $70,000,while 90 percent demand a salary of $100,000. There are two phases to theinterview process that every interviewee must go through. Phase 1 is the initial one-hour on-campus interview. All candidates interviewed in Phase 1 arealso invited to Phase 2 of the interview, which consists of a five-hour officevisit. In all, you spend six hours interviewing each candidate and value thistime at $900. In addition, it costs a total of $4,900 in travel expenses to inter-view each candidate. You are very impressed with the first interviewee completing both phases of BK Books’ interviewing process, and she hasindicated that her reservation salary is $100,000. Should you make her anoffer at that salary or continue the interviewing process? Explain.

Order a unique copy of this paper
(550 words)

Approximate price: $22

Place Order
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.

Zero-plagiarism guarantee

The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.

Read more

Free-revision policy

The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.

Read more

Privacy policy

The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.

Read more

Fair-cooperation guarantee

By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.

Read more

Calculate the price

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
× WhatsApp us for help