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    A2 Problem Solving Assignment

    Uploaded by

    MOIN UDDIN AHMED
    The document contains two problems related to demand curves. Problem 1 provides a demand curve for caps and asks to calculate sales at different prices. Problem 2 provides a demand curve for tablets based on price, population, income, and advertising. It asks to determine the demand curve for a specific market and calculate sales at different prices and the price needed to sell 45,000 units.

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    A2 Problem Solving Assignment

    Uploaded by

    MOIN UDDIN AHMED
    278 views2 pages
    The document contains two problems related to demand curves. Problem 1 provides a demand curve for caps and asks to calculate sales at different prices. Problem 2 provides a demand curve for tablets based on price, population, income, and advertising. It asks to determine the demand curve for a specific market and calculate sales at different prices and the price needed to sell 45,000 units.

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    The document contains two problems related to demand curves. Problem 1 provides a demand curve for caps and asks to calculate sales at different prices. Problem 2 provides a demand curve for tablets based on price, population, income, and advertising. It asks to determine the demand curve for a specific market and calculate sales at different prices and the price needed to sell 45,000 units.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    278 views2 pages

    A2 Problem Solving Assignment

    Uploaded by

    MOIN UDDIN AHMED
    The document contains two problems related to demand curves. Problem 1 provides a demand curve for caps and asks to calculate sales at different prices. Problem 2 provides a demand curve for tablets based on price, population, income, and advertising. It asks to determine the demand curve for a specific market and calculate sales at different prices and the price needed to sell 45,000 units.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Student Name: Moin Uddin Ahmed ID: 11925

    A2 - Problem Applications

    Problems

    1. The following function describes the demand condition for a company that makes caps
    featuring names of college and professional teams in a variety of sports.

    Q = 2,000 - 100P

    Where Q is cap sales and P is price.

    a. How many caps could be sold at $12 each?

    b. What should the price be in order for the company to sell 1,000 caps?

    c. At what price would cap sales equal zero?

    a. Q =2000-100(12)
    Q=2000-1200
    Q=800
    800 caps could be sold at 12$ each

    b. Q=2000-100P
    1000=2000-100p
    100p=2000-1000
    100p=1000
    P=10
    1000 caps could be sold at 10$ each

    c. 0=2000-100p
    100p=2000
    P=20
    Caps sale would be zero at 20$ each

    2. The ABC marketing consulting firm found that a particular brand of tablet PCs has the
    following demand curve for a certain region:

    Q = 10,000 - 200P + 0.03Pop + 0.6I + 0.2A

    Where Q is the quantity per month, P is price ($), Pop is population, I is disposable income
    Per household (S), and A is advertising expenditure ($).

    a. Determine the demand curve for the company in a market in which P = 300,
    Pop = 1,000,000, I = 30,000, and A = 15,000.

    Instructor: Asif Z. Warsi Page 1


    Student Name: Moin Uddin Ahmed ID: 11925

    b. Calculate the quantity demanded at prices of $200, $175, $150, and $125.

    c. Calculate the price necessary to sell 45,000 units.

    Answer:

    a. Demand curve for the company is calculated as follows:


    Q = 10,000 – (200 X 300) + (0.03 X 1,000,000) + (0.6 X 30,000) + (0.2 X 15,000)
    Q = 10,000 – 60,000 + 30,000 + 18,000 + 3,000.
    Therefore, Q = 1,000 If P = 0
    Then Q = 10,000 – (200 X 0) + (0.03 X 1,000,000) + (0.6 X 30,000) + (0.2 X 15,000).
    Q = 10,000 + 30,000 + 18,000 + 3,000 = 61,000
    If Q = 0
    Then 200p = 10,000 + 30,000 + 18,000 + 3,000.
    P = 61,000/200.
    P = 305.

    b. The quantity demanded at prices of $200, $175, $150, and $125 are:

    200
    Q = 10,000 – (200 X 200) + (0.03 X 1,000,000) + (0.6 X 30,000) + (0.2 X 15,000)= 10,000 –
    40,000 +30,000 + 18,000 + 3,000= Q=21,000

    175
    Q = 10,000 – (200 X 175) + (0.03 X 1,000,000) + (0.6 X 30,000) + (0.2 X 15,000)= 10,000 –
    35,000 + 30,000 + 18,000 + 3,000= Q=26,000

    150
    Q = 10,000 – (200 X 150) + (0.03 X 1,000,000) + (0.6 X 30,000) + (0.2 X 15,000)= 10,000 –
    30,000 + 30,000 +18,000 +3,000= Q=31,000

    125
    Q = 10,000 – (200 X 125) + (0.03 X 1,000,000) + (0.6 X 30,000) + (0.2 X 15,000)=10,000 –
    25,000 + 30,000 + 18,000 + 3,000= Q=36,000

    c. Price necessary to sell 45,000 units is: 3.

    Instructor: Asif Z. Warsi Page 2

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