Order the answer to: An analyst for FoodMax estimates that the demand for its

Assignment Help business-economics Order the answer to: An analyst for FoodMax estimates that the demand for its

business-economics

Order the answer to: An analyst for FoodMax estimates that the demand for its

Question An analyst for FoodMax estimates that the demand for its “Brand X” potato chips is given by ln Qdx = 10.34 – 3.2 ln PX + 4PY + 1.5 ln AX, where QX and PX are the respective quantity and price of a four-ounce bag of Brand X potato chips, PY is the price of a six-ounce bag sold by its only competitor, and AX is FoodMax’s level of advertising on brand X potato chips. Last year, FoodMax sold 5 million bags of Brand X chips and spent $0.25 million on advertising. Its plant lease is $2.5 million (this annual contract includes utilities) and its depreciation charge for capital equipment was $2.5 million; payments to employees (all of whom earn annual salaries) were $500,000. The only other costs associated with manufacturing and distributing Brand X chips are the costs of raw potatoes, peanut oil, and bags; last year FoodMax spent $2.5 million on these items, which were purchased in competitive input markets. Based on this information, what is the profit-maximizing price for a bag of Brand X potato chips?
Subject business-economics
Ready to try a high quality writing service? Get a discount here