Consumer demand analysis and estimation applied problems please

Consumer Demand Analysis and Estimation Applied Problems

 

Please complete the following two applied problems:

Problem 1: 

Patricia is researching venues for a restaurant business. She is evaluating three major attributes that she considers important in her choice: taste, location, and price. The value she places on each attribute, however, differs according to what type of restaurant she is going to start. If she opens a restaurant in a suburban area of Los Angeles, then taste is the most important attribute, three times as important as location, and two times as important as price. If she opens a restaurant in the Los Angeles metropolitan area, then location becomes three times as important as taste and two times as important as price. She is considering two venues, respectively, a steak restaurant and a pizza restaurant, both of which are priced the same. She has rated each attribute on a scale of 1 to 100 for each of the two different types of restaurants.

Steak Restaurant

Pizza Restaurant

Taste
Location
Price

80
55
65

70
80
50

Show all of your calculations and processes. Describe your answer for each question in complete sentences.

  1. Which of the two options should Patricia pursue if she wants to open a restaurant in a suburban area of Los Angeles? Calculate the total expected utility from each restaurant option and compare. Graph is not required. Describe your answer, and show your calculations.
  2. Which of the two options should she pick if she plans to open a restaurant in the Los Angeles metropolitan area? Describe your answer, and show your calculations.
  3. Which option should she pursue if the probability of finding a restaurant venue in a suburban area can be reliably estimated as 0.7 and in a metropolitan area as 0.3? Describe your reasoning and show your calculations.
  4. Provide a description of a scenario in which this kind of decision between two choices, based on weighing their underlying attributes, applies in the “real-world” business setting. Furthermore, what are the benefits and drawbacks, if any, to this method of decision making?

Problem 2:

The demand function for Newton’s Donuts has been estimated as follows:

Qx = -14 – 54Px + 45Py + 0.62Ax 

where Qx represents thousands of donuts; Px is the price per donut; Py is the average price per donut of other brands of donuts; and Ax represents thousands of dollars spent on advertising Newton’s Donuts. The current values of the independent variables are Ax=120, Px=0.95, and Py=0.64.

Show all of your calculations and processes. Describe your answer for each question in complete sentences, whenever it is necessary.

  1. Calculate the price elasticity of demand for Newton’s Donuts and describe what it means. Describe your answer and show your calculations.
  2. Derive an expression for the inverse demand curve for Newton’s Donuts. Describe your answer and show your calculations.
  3. If the cost of producing Newton’s Donuts is constant at $0.15 per donut, should they reduce the price and thereafter, sell more donuts (assuming profit maximization is the company’s goal)?
  4. Should Newton’s Donuts spend more on advertising?
Get 20% Discount on This Paper
Pages (550 words)
Approximate price: -

Try it now!

Get 20% Discount on This Paper

We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

Australia Assessments has gained an international reputation of being the leading website in custom assignment writing services. Once you give us the instructions of your paper through the order form, we will complete the rest.

Essays

Essay Writing Services

As we work towards providing the best custom assignment services, our company provides assignment services for any type of academic essay. We will help you develop professionally written essays that are rich in content and free from plagiarism.

Admissions

Admission and Business Papers

Our skilled team of professional writers will ensure that we help you craft a remarkable admission essay for your desired Master's program in your institution of choice. We won't stop there. Once you enter the job market, we will be available to secure you a position at your desired worksite by creating an outstanding portfolio or resume.

Editing

Editing and Proofreading

Our editorial team is always available for all editing and proofreading services. They check completed papers by our writers and also provide professional opinions to papers completed by our clients.

Coursework

Technical papers

We harbor professional academic writers with different qualifications in diverse academic fields. As such, we are capable of handling both simple and technical papers. Ensure that you provide us with correct and complete instructions in the order form.