PROBLEM A–4 The Economists’ Approach to Pricing [LO1]
The postal service of St. Lucia, an island in the West Indies, obtains a significant portion of its revenues from sales of special souvenir sheets to stamp collectors. The souvenir sheets usually contain several high-value St. Lucia stamps depicting a common theme, such as the anniversary of Princess Diana’s funeral. The souvenir sheets are designed and printed for the postal service by Imperial Printing, a stamp agency service company in the United Kingdom. The souvenir sheets cost the postal service $0.60 each. (The currency in St. Lucia is the East Caribbean dollar.) St. Lucia has been selling these souvenir sheets for $5.00 each and ordinarily sells 50,000 units. To test the market, the postal service recently priced a new souvenir sheet at $6.00 and sales dropped to 40,000 units.
1. Does the postal service of St. Lucia make more money selling souvenir sheets for $5.00 each or $6.00 each?
2. Estimate the price elasticity of demand for the souvenir sheets.
3. Estimate the profit-maximizing price for souvenir sheets.
4. If Imperial Printing increases the price it charges to the St. Lucia postal service for souvenir sheets to $0.70 each, how much should the St. Lucia postal service charge its customers for the souvenir sheets?
Two factor theory of motivation provides useful insights into the relationship between individual and situational or hygiene factors. Which of the following is a hygiene ...Apr 06 2018
Jack purchased 100 shares of Potter's Violin stock at a price of $129.64 four months ago. He sold all stocks today for $123.74. During the year, the stock paid dividends ...Jul 11 2021
NAFTA is an example of a free trade area consisting of the United States, Canada, Mexico, and the European Community.22. It is...Feb 11 2020
Suppose you have the following values for a short-run production process: Q = 20, VC = 100, FC = 600 and MC = 40. Given this, we know that the: A. average cost curve mus...Dec 14 2019
You are considering two loans. The terms of the two loans are equivalent with the exception of the interest rates. Loan A offers a rate of 7.75 percent, compounded daily....Jul 11 2021
Draw structures corresponding to the following IUPAC names:(a) 1,1-Dimethylcyclooctane(b) 3-Cyclobutylhexane(c) 1,2-Dichlorocyclopentane(d) 1,3-Dibromo-5-methylcyclohexaneJul 01 2021
What is the value of a 27 year bond that makes no coupon payments (0-coupon) with a yield to maturity (quoted rate) of 3.5 % and a maturity value of $1000? Note, I know t...Aug 09 2021
The entire system rotates about the vertical axis at constant angular speed ω1, and the rotation rate ω2 of the rotor relative to bar BC also is constant.(a) Describe the...Jun 16 2020
Two identical coils X and Y of 1000 turns each lie in parallel planes such that 80% of flux produced by one coil links with the other. If a current of 5A flowing in X pro...May 31 2021
Financial manger can create value for a firm by creating more cash flow for it than it uses. To do so, they should make investment decisions so that the firm may buy asse...Aug 16 2020