First, when demand is greater than supply the gas prices rise; if it costs more to produce and supply it or if people buy more of it at the current price. On the other hand, when supply becomes greater than demand the gas prices fall; if it costs less to produce and supply or people buy less gas at the current price. When the price where the quantity consumers demand matches the quantity that producers supply the prices will stop rising or falling and become steady. Second, how high or low the price of gas is will be determined by how the consumers and producers respond to these price changes. The most important factor in the price of gasoline in the U.S. is the worldwide supply, demand and competition for crude oil.
If the profit objective of $200,000 remains the same, and the sales price and variable costs remain unchanged, how many more bottles of wine must it sell? 2. Executives of Studio Recordings, Inc., produced the latest compact disc by the Starshine Sisters Band, titled Sunshine. The following cost information pertains to the new CD: CD package and disc (direct material and labor) $1.5/CD; Songwriters’ royalties $0.5/CD; Recording artists’ royalties $1.00/CD; Advertising and promotion $280,000; Studio recordings, Inc., overhead $250,000; Selling price to CD distributor $9.00. Calculate the following: a) Break-even volume in CD units and dollars; b) Net profit if 1 million CDs are sold; c) Necessary CD unit volume to achieve a $500,000 profit.
To drive both market share and earnings Kodak proposed to introduce a new brand “Funtime” at Fuji and Konica’s price level, setting it 20% below the price of Kodak’s flagship Gold Plus brand. It is believed that other “price brands” on average are about 30% less than Kodak Gold Plus. With no advertising support, the Funtime would be sold twice a year at off-peak film use times and available in limited quantities, packaged only in “value packs”. Gold Plus would remain flagship brand with 60% of the dollar advertising support. Royal Gold would be the new name for the products in Superpremium segment with recommended retail prices at 20% above Gold Plus.
That was a $248 difference between the Xbox 360 and the PS3. As well as being an overpriced console, the Xbox 360 suffered from the famous Red Ring of Death. This was cause by systems overheating. In 2010 a survey of over 500,000 people (Nofussreviews.com) show us that the Xbox 360 had a 42 percent failure rate compared to the PS3’s 8 percent. Yes, the 360 is still showing more numbers in sales of unit, but look at the failure rate of the console.
Customer Analysis The total industrial consumption of cyano-acrylates which the new Bond-A-Matic 2000 would dispense was 265,000 pounds in FY 1978, expected to grow to about 335,000 pounds in FY 1979. Across 16 SIC categories, approximately 174,909 firms currently used cyano-acrylates (at a 15.5% market penetration.) 11% of CA users, i.e. approximately 19,240 firms used over 10 pounds of CAs per year, comprising at-least 75% of total current market. Assuming that growth in the CA segment stagnates, and that only heavy CA applicators would be interested in dispensing equipment the total market is still estimated at 19,240 users.
Supply & Demand: Crude Oil and Gasoline According to David Ramberg and John Parsons (2012), “Several recent studies establish that crude oil and natural gas prices are cointegrated [sic]” (para. 1). Because the price of crude oil tends to change quite often, it causes the cost of gasoline to vary as well. Supply and demand is one of the main reasons why gas prices are driven up and down. More than likely, the price of crude oil will decline when the level of supply is at a high.
Question 3 Which price increase is needed to offset the profit impact of the increased raw material costs (assuming that volumes are constant)? Which price decrease will result from instituting price-flex (assume a best case and a worst case)? Answer 3 The selling price would increase by offsetting the raw material cost which is given in the “Appendix A” which shows that increase in the price by 6.5% would result in the positive side and a reductioncompany from reduction in the price. Understanding all this is done with respect to the case material. The volume is a constant which is assumed at 80% in the analysis of the price.
The LM Curve will see a shift to the left and decrease the value of "Y" if the IR is higher than the ER of the market. The GDP is increasing in value and there will be an increase of savings.. If the IR was below the equilibrium, the opposite of the previously stated would occur. The LM Curve would see a shift to the right, therefore increasing the value of "Y". The GDP value would then decrease, due to the move from Point A to C, and increase employment which would decrease savings.
The demand curve is plotted on a graph with price labeled on the y-axis and quantity labeled on the x-axis. The resulting curve is downward-sloping; thus, increases in price result in a fall in demand for a given product. A measure of the relationship between a changes in the quantity demanded of a particular good and a change in its price. Price elasticity of demand is a term in economics often used when discussing price sensitivity. The degree to which demand for a good or service varies with its price is called price demand elasticity.
The long run average cost curve is explained by the economies of scale, and diseconomies of scale. It explains why LRAC goes down, and then goes up.As production increases, there are two basic influences at work: Economies of scale, and Diminishing marginal returns.Economies of scale cause average cost to decrease as production increases.Diminishing marginal returns causes average cost to increase as production increases. If Economies of scale outweighs diminishing marginal returns at low volumes, and eventually diminishing marginal returns outweighs economies of scale at high volumes the curve will be a U shape. A typical average cost curve will have a U-shape, because fixed costs are all incurred before any production takes place and marginal costs are typically increasing, because of diminishing marginal productivity.There is an indication of economies of scale if marginal costs are below average costs and average costs decreasing as quantity increase. An increasing marginal cost curve will intersect a U-shaped average cost curve at its minimum, after which point the average cost curve begins to slope upward.