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zysi [14]
3 years ago
10

​Johnny's Shop-and-Pay is a regional grocery​ chain, and its marketing manager is trying to determine the​ profit-maximizing cou

pon program for the​ store's laundry detergent brand. Coupon users at the store have an elasticity of demand for this product that equals minus​3, and the elasticity of demand for​ non-users of the coupon for the store brand equals minus1.5. If the full retail​ (undiscounted) price of the detergent is​ $10 per​ box, what is the optimal discount to provide for coupon​ users?
Business
1 answer:
insens350 [35]3 years ago
8 0

Answer:

50% discount

Explanation:

We have the formula

price = marginal cost*(E/(E + 1) )

We are given the following:

price per unit item = $10

elasticity of demand, E = -3 for coupon users

marginal cost MC = ?

Hence

10 = MC * (-3/(-3 + 1))

10 = MC * 1.5

MC = 10 / 1.5 = 6.67

So, the appropriate discount that can be given is

price - marginal cost = 10 - 6.67 = $3.33 per box

OR  3.33 / 6.67 = 50% discount over cost.

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Scorpion4ik [409]

Answer:

c. $24,990

Explanation:

The Term 2/15 net 45 mean 2% cash discount is offered if the payment is made within 15 days otherwise the credit period is 45 days. There is no after 15 days of sale.

Amount of Sale = $25,500

Discount Rate = 2%

The Pound Co. paid the invoice within the discount period. They are eligible to receive the 2% discount on sale value.

Discount Amount = $25,500 x 2% = $510

Net Sales amount in this transaction = $25,500 - $510

Net Sales amount in this transaction = $24,990

8 0
3 years ago
What are the 4 targeting strategies a company can use to select a target market? Explain each one.
Maslowich
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Hope this helps!
5 0
3 years ago
Your company has earnings per share of $ 4.19. It has 1.9 million shares​ outstanding, each of which has a price of $59. You are
sveticcg [70]

Answer:

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8 0
3 years ago
Two TransWorld Airline mechanics failed to properly repair the landing gear of a 747. As a result, the plane’s landing gear coll
lisabon 2012 [21]

Answer:

no

Explanation:

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5 0
3 years ago
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Answer:

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Explanation:

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