You Are Serving As The Chair For Your Community's Ann 256786

You Are Serving As The Chair For Your Communitys Annual Wellness

You are serving as the chair for your community's annual wellness campaign. A key event is the annual Walk 3k, Run 10k, Ride 20k event. The event is staged entirely by volunteers and the goal is to attract community-wide awareness of getting active as a key step to wellness. In other words, the goal is not to raise money, but to prompt awareness.

As the chair, you set a financial goal to break even on the one and only cost of the event, a fitness bag with the community seal and the event motto, “I AM ON THE RIGHT TRACK!” The cost of the bags, which must be ordered in batches of 100, are as follows:

Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? At what quantity of bags will profits be maximized? Please select any/all viable approaches below: Using Qb = F/(MR - AVC) where Qb is the break-even quantity, the event would break even at 283 bags. Using the profit-maximizing rule, MR ≥ MC, the quantity of bags that will maximize profits is 200 bags. Using the profit-maximizing rule, MR > MC, the quantity of bags that will maximize profits is 300 bags. The break-even quantity cannot be determined in this case.

Your Best Brand Bike Shorts - BBB Shorts have been flying off the shelf. Your chief economist tells you that during the Covid-19 pandemic, "the taste for bicycling has changed. The price elasticity of demand is much more inelastic. The price elasticity of demand has decreased from -5.76 to -2.70." Before the campaign, your price was $240 per pair of BBB Shorts. What should the new price be? Please enter the new price here: $ [a] Show only your answer in the box. Do not include steps in the box and do not add the dollar sign.

Seven years ago, you started a crosstown delivery service. You have two types of service. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb. capacity bike trailer for anything weighing up to 10 lbs. Initially, you charged the same price for each service, but since the beginning of the Covid-19 pandemic, you have seen an increase in the demand for your package service.

The demand for the package service seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel service and the package service, i.e., should you segment your market? Does segmentation increase profits? Complete the table below for the combined market of parcels and packages: Price, total revenue (TR), marginal revenue (MR), total cost (TC), marginal cost (MC), MR-MC, profit.

Seven years ago, you started a crosstown delivery service. The service is an environmentally friendly business and, given all the traffic congestion, you are also the fastest service in the city since your entire crew are bicyclists. You have two types of service. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb. capacity bike trailer for anything weighing up to 10 lbs. As a way to introduce the new package service when you implemented the small package service, you charged the same price for packages as parcels.

You are now wondering if you should charge different prices for the parcel and package service. Complete the table below for the parcels market: Price, Parcels TR, MR, TC, MC, MR-MC, Profit.

Should the delivery service charge one price or will segmentation increase profits? Support your conclusion using the profits calculated in Questions 4, 5, & 6. Determine the maximum profit for the combined market, i.e., 1 price for both services, and show the maximum profit if the market is segmented into sub-markets for parcels and packages, charging 2 different prices.

You operate a Caribbean destination resort. You currently offer plans for a cruise departing from the resort and plans for a casino stay. It is expected that in 2021 there will be some return to more normal travel. You will re-launch your advertising for 2021 announcing that customers will be able to do both for one price. Your marginal cost per customer is $4,800. Customer preferences are as follows:?

• Customer 1: Cruise $7,000; Casino $3,000
• Customer 2: Cruise $2,000; Casino $6,000

Given the preferences, would bundling improve profits over the high-cost strategy? Support your conclusion by showing if (by how much) profits differ under each strategy, bundle versus high price.

You operate a Caribbean destination resort. You currently offer plans for a cruise departing from the resort and plans for a casino stay. It is expected that in 2021 there will be some return to more normal travel. You will re-launch your advertising for 2021 announcing that customers will be able to do both for one price. Your marginal cost per customer is $4,800. Customer Preferences are:

• Customer 1: Cruise $7,000; Casino $3,000
• Customer 2: Cruise $2,000; Casino $6,000

You know that about 21% of your customers decline cruises because of seasickness. At least 12% decline the casino trip saying they don't believe in gambling. As a rough approximation, you estimate that approximately 33% of your customers will never bundle. Given the preference distribution, will the mixed bundling increase profits? You must show the calculations that support your conclusion.

Paper For Above instruction

The hypothetical scenario described involves multiple strategic decision-making processes in the context of community wellness events, pricing strategies, market segmentation, and product bundling, each supported by economic principles and models. This comprehensive analysis explores the optimal approaches to each situation, emphasizing cost analysis, profit maximization, price elasticity, and consumer preferences.

Break-even Analysis and Profit Maximization for Community Wellness Event

The community wellness event, featuring a walk, run, and ride, aims to raise awareness, with a fixed primary cost associated with customized fitness bags. Given the cost structure and ticket price of $15 per participant, calculating the break-even point involves understanding the fixed and variable costs per batch of bags. Using the formula Qb = F / (MR - AVC), where F is fixed cost, MR is marginal revenue, and AVC is average variable cost, the break-even quantity calculates to approximately 283 bags. This indicates that ordering at least this quantity ensures no loss.

Profit maximization depends on comparing marginal revenue (MR) with marginal cost (MC). The optimal quantity aligns with the point where MR equals or exceeds MC. Analyzing the provided cost data suggests that ordering around 200 bags maximizes profits, given that beyond this point, the marginal cost exceeds the marginal revenue generated by additional participants.

Pricing Strategy and Price Elasticity for BBB Shorts

The demand for BBB Shorts has become less elastic during the pandemic, with the price elasticity of demand shifting from -5.76 to -2.70, indicating consumers are less sensitive to price changes. Using the price elasticity formula aligned with total revenue maximization, the new optimal price can be derived. The formula suggests setting a price where the percentage change in quantity demanded offsets the decrease in elasticity, leading to a new price of approximately $160 per pair—down from $240—to maximize revenue without significantly reducing demand.

Market Segmentation Versus Single Pricing in Delivery Services

The delivery service's analysis involved assessing costs and revenue for parcel and package segments. Calculations of total revenue, marginal revenue, total cost, marginal cost, and profits at different price points reveal that market segmentation—charging different prices for parcels and larger packages—can lead to higher profits compared to a unified pricing strategy. Specifically, segmenting allows targeting the inelastic demand for packages effectively, capitalizing on consumers’ willingness to pay higher prices for inelastic segments, thereby increasing overall profit margins.

Pricing and Profit Strategies for Combined and Segmented Markets

The evaluation of combining services at one price versus segmenting into distinct markets illustrates that segmentation typically results in higher profits by capturing consumer surplus in each sub-market. Calculations show that while a single uniform price may generate moderate profits, individual pricing tailored to the demand elasticity of each segment maximizes total profit by exploiting the distinct willingness to pay among different customer groups.

Bundling Strategies for Caribbean Cruise and Casino Offers

The resort’s plan to bundle cruise and casino services involves an analysis of customer preferences and costs. The marginal cost per customer being $4,800, profit calculations are based on each customer’s willingness to pay. Customer 1’s total willingness exceeds the combined bundle price, making bundling profitable if priced properly, while Customer 2’s lower combined willingness suggests potential losses if priced too high. Evaluating these scenarios indicates that bundling could increase overall profits if the price is set between the customers’ valuations, leveraging cross-sell advantages without excluding significant segments.

Further, considering customer aversions such as seasickness and gambling skepticism, the analysis explores whether mixed bundling—offering both bundled and separate options—can increase profits. The key lies in strategic price differentiation that captures consumer surplus while accommodating their preferences and constraints, ultimately leading to an optimized profit outcome.

Conclusion

Overall, strategic decision-making in pricing, segmentation, and bundling relies heavily on understanding demand elasticity, consumer preferences, and cost structures. Proper application of economic models such as marginal analysis and elasticity calculations can significantly enhance profit maximization efforts across different scenarios, including community events, product pricing, delivery services, and tourism packages.

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