Pricing, cost and profits | Economics homework help
1. To conduct an experiment , AMC increased movie ticket prices from $9.0 to $10 and measured the change in ticket sales. Using data over the following month, they concluded that the increase was profitable. However, over the subsequent months, they changed their minds and deiscontued the experiment. How did the timing affect their conclusion about profitability of increasing prices?
2. Suppose you have a production technology that can be characterized by a learning curve. Everytime you increase production by one unit, your cost decrease by $6. The first unit cost you $64 to produce. If you recieve a request for proposal (RFP) on a project for four units, what is your break-even price? suppose that if you get the contract, you estimate that you can win another project for two more units. Now what is your break-even price for those two units?
3. A multiconcept restaurant incorporates two or more restaurants, typically chains, under one roof. Sharing facilities reduces cost of both real estate and labor. The multiconcept restaurants typically offer a limited menu, compared with full sized, stand alone restaurants. For exampple KMAC operates a combination Kentucky Fried Chicken (KFC)/Taco Bell restaurant. The food preparation areas are separate, but orders are taken at shared point-of-sale (POS) stations. If Taco Bell and KFC share facilities, they reduce fixed cost by 3o%; however, sales in joint facilties are 20% lower than sales in two separate facilties. What do these numbers imply for the decision of when to open a shared facility versus two separate facilties?
