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Demand Analysis for Caps and Tablets

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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MOIN UDDIN AHMED
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412 views2 pages

Demand Analysis for Caps and Tablets

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.

Uploaded by

MOIN UDDIN AHMED
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

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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