You are about to go live with a Latin music download service that will compete head-to-head with Apple's iTunes®. You will be selling digital albums of regional (Mexican/Tejano) music for $5 each, pop/rock albums for $4 each, and tropical (salsa/merengue/cumbia/bachata) for $6 each. Your servers can handle up to 33,000 downloaded albums per day, and you anticipate on the basis of national sales, revenues from regional music will be at least five times those from tropical music. You also anticipate that you will sell at least 19,000 pop/rock albums per day as a result of the very attractive $4 price. On the basis of these assumptions, how many of each type of album should you sell for a maximum daily revenue? regional music albumspop/rock music albumstropical music albums What will your daily revenue be?

You are about to go live with a Latin music download service that will compete head-to-head with Apple's iTunes®. You will be selling digital albums of regional (Mexican/Tejano) music for $5 each, pop/rock albums for $4 each, and tropical (salsa/merengue/cumbia/bachata) for $6 each. Your servers can handle up to 33,000 downloaded albums per day, and you anticipate on the basis of national sales, revenues from regional music will be at least five times those from tropical music. You also anticipate that you will sell at least 19,000 pop/rock albums per day as a result of the very attractive $4 price. On the basis of these assumptions, how many of each type of album should you sell for a maximum daily revenue? regional music albumspop/rock music albumstropical music albums What will your daily revenue be?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter12: More Realistic And Complex Pricing

Section: Chapter Questions

Problem 12.4IP

See similar textbooks

Similar questions

Your friend bought two tickets to see James Taylor play at the Save-On Center, but now her partner can’t make it. You knew about the concert, but you decided you’re not a big enough fan to pay $100 for a ticket. On the other hand, she would have bought tickets even if they cost $150 each. If you assume that she cannot sell the ticket anywhere else, what is the minimum price you can offer her for the ticket that she will accept? Explain your answer.
You are a developer that has just finished writing a new game and would like to publish it with this platform’s store. You do not expect to incur in any more costs developing the product. The app store typically keeps 20% of your revenue but, in order to give an incentive to sellers, the app store will only charge 15% of revenue to successful apps selling more than 60,000 units a year, and 10% to top-selling apps with more than 85,000 units sold. Assume that there are no extra (in-game) charges beyond the price to acquire the game. Using the data in the table below, at what price should you sell your game at? (Don't forget to take into account elasticity) Quantity Price Total Revenue To Store Revenue Elasticity 96261.14 $ 0.99 $ 95,298.53 10% $ 85,768.67 -0.11 85920.32 $ 1.99 $ 170,981.43 10% $ 153,883.29 -0.24 75579.50 $ 2.99 $ 225,982.70 15% $ 192,085.29 -0.41 65238.68 $ 3.99 $ 260,302.33 15% $…
please quickly thank you very much
SITUATION: You are thinking about becoming a Paradise Coffee franchisee. Franchisees are offered a business specializing in producing an exclusive line of exotic coffee drinks (similar to Starbucks). Franchisees have had good success in towns without a Starbucks (Paradise franchises gross $220,000 sales on average per year, and you believe you can gross as much, too). You will have to pay Paradise Coffee, Inc., a franchise fee of $3,000 a year plus 2.5% of gross sales. You will also pay an annual National advertising fee of 3% of gross sales. Paradise requires that you use their logo-imprinted goods (plates, cups, napkins). They are purchased in bulk from Paradise and will cost you $40,000 per year. You also have to use their special Paradise Roast coffee beans, which cost $12.00 per pound. You estimate you will use 400 pounds of beans a year. Other food ingredients (syrups, biscotti, whipped cream, soft drinks, etc) will cost $18,000 a year. You will have to hire three…
You were able to purchase two tickets to an upcoming concert for $100 apiece when the concert was first announced three months ago. Recently, you saw that StubHub was listing similar seats for $225 apiece. What does it cost you to attend the concert?
Туре of each type of subscriber website Number of Travel and Travel Cooking website cooking subscriber only only bundle 1,000 Travelers $10 $6 $16 1,000 Cooks $5 $10 $15 As shown in the table above, a company is targeting two groups of consumers-those who love to travel and those who love to cook. The company has very useful web content that it wants to market to these two groups, and it has estimated what each group would be willing to pay (their demand prices) for access to each type of content for a month. What is the best option for the company? Select one: a. Price the travel website at $5/month, the cooking website at $6/month, and sell them separately. O b. Price a bundle of the two websites at $16/month. O c. Price the travel website at $10/month, the cooking website at 10/month, and sell them separately. O d. Price a bundle of the two websites at $15/month.
In early 2008, you purchased and remodeled a 120-room hotel to handle the increased number of conventions coming to town. By mid-2008, it became apparent that the recession would kill the demand for conventions. Now, you forecast that you will be able to sell only 10,000 room-nights, which cost $80 per room per night to service. You spent $25.00 million on the hotel in 2008, and your cost of capital is 10%. The current going price to sell the hotel is $20 million. If the estimated demand is 10,000 room-nights, the break-even price is:__?____per room, per night. (Hint: Remember that the cost of capital is the opportunity cost, or true cost, of making an investment.)
Marissa, a single mother with one child, can’t seem to make ends meet. Rent and utilities eat up most of her paycheck, so when something unexpected happens, she is often short. Last week, her car broke down but she was already way behind in credit card payments. Yesterday, a collections guy called and said that if she didn't pay at least $100 right away, she’d be taken to court. When she got off the phone, she started to cry. Her friend Kathy asked her what was wrong. Marissa described to her how bad her financial situation is, and Kathy thought that Marissa might qualify for food stamps. Marissa has a full-time job so she isn't sure that she’ll qualify, and even if she does, she isn’t sure it will help too much. ) How is it possible that someone making almost 25% more than the minimum wage, and working full-time, qualifies for food assistance? Fully explain.
Suppose you own a profitable small business in another state and you wanted to hold a meeting, but you needed to make a decision on whether to fly to the other state using your free frequent-flyer miles and pay a $100 cab-fare or hold a video conference meeting (at a facility that you have already prepaid a $2000 access-fee but must also paid a $155/hour to use the facility). What option should you choose?
Why Real Saffron Is So Expensive Even in the expensive world of spices, saffron stands out. And real saffron can cost you over $10,000 per kilogram. Saffron is the red stigma of the Crocus sativus. Each crocus has three small stigmas that have to be picked carefully by hand. No machine can do the delicate work required to harvest these thin threads. And it can take 40 hours of hard manual labor to produce just 1 kilogram of high-quality saffron. Rising labour cost supports the price of saffron. Expansion of healthcare sector is anticipated to remain a driving force for the saffron market in the coming decade. Saffron has crocin and safranal that are known to cure various types of diseases. It is used in several herbal and pharmaceutical drugs owing to rising awareness among consumers regarding health benefits of saffron. b. From the above article, identify the factor that affects the supply of saffron. Clearly state how this affects supply of saffron.
Why Real Saffron Is So Expensive Even in the expensive world of spices, saffron stands out. And real saffron can cost you over $10,000 per kilogram. Saffron is the red stigma of the Crocus sativus. Each crocus has three small stigmas that have to be picked carefully by hand. No machine can do the delicate work required to harvest these thin threads. And it can take 40 hours of hard manual labor to produce just 1 kilogram of high-quality saffron. Rising labour cost supports the price of saffron. Expansion of healthcare sector is anticipated to remain a driving force for the saffron market in the coming decade. Saffron has crocin and safranal that are known to cure various types of diseases. It is used in several herbal and pharmaceutical drugs owing to rising awareness among consumers regarding health benefits of saffron. a. From the above article, identify the factor that affects the demand for saffron. Clearly state how this affects demand for saffron. b. From the above…
You are the manager of an organization in America that distributes blood to hospitals in all 50 states and the District of Columbia. A recent report indicates that nearly 50 Americans contract HIV each year through blood transfusions. Although every pint of blood donated in the United States undergoes a battery of nine different tests, existing screening methods can detect only the antibodies produced by the body’s immune system – not foreign agents in the blood. Since it takes weeks or even months for these antibodies to build up in the blood, newly infected HIV donors can pass along the virus through blood that has passed existing screening tests. Happily, researchers have developed a series of new tests aimed at detecting and removing infections from donated blood before it is used in transfusions. The obvious benefit of these tests is the reduced incidence of infection through blood transfusions. The report indicates that the current price of decontaminated blood is $60 per pint.…