Question: a. Create a spreadsheet describing Amazon's output and pricing choices with respect to the Kindle e-reader. (Use the template from Problem S1 with price equation:

a. Create a spreadsheet describing Amazon's output and pricing choices with respect to the Kindle e-reader. (Use the template from Problem S1 with price equation: P = 294 − 35Q and MC = $126.) Use your spreadsheet optimizer to find the combination of output and price that maximizes profit.
b. Now include the extra net revenue from e-book sales, $100 per Kindle. (Compute this total in cell G9 according to the formula: = 100*B7.) Finally, in cell H9, compute total profit (from both Kindles and e-book sales). What combination of Kindle output and price maximizes Amazon's total profit? Explain why Amazon should cut its price relative to the price in part (a).

Step by Step Solution

★★★★★

3.44 Rating (167 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a To confirm these values on our spreadsheet we maximize cell F7 by changing cell B7 ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1239-B-E-M-E(7296).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Redstone Clayworks, Inc., a small firm located in Sedona, manufactures clay fire pits that homeowners place on their patios for decoration and light-duty heating. Red-stone is one of 53 firms...

The El Dorado Star is the only newspaper in El Dorado, New Mexico. Certainly, the Star competes with The Wall Street Journal, USA Today, and the New York Times for national news reporting, but the...

A second firm's production function is given by the equation Q = 12L.5K.5. Input prices are $36 per labor unit and $16 per capital unit, and P = $10. a. In the short run, the firm has a fixed amount...

Use the template to create a spreadsheet describing Amazon s output and pricing choices with respect to the Kindle e - reader. ( Use the template from Problem S 1 with price equation: P = 2 9 4 3 5 Q...

19 Name: ____________________________________ 1. Your friend has a credit card with an APR of 49.9% ! What would his finance charge be on a $500 charge for just 1 month? 2. Your friend has 2 credit...

I have completed (a) through (e) on this assignment.. I need assistance completing f. Below is the instructions for the assignment, my complete excel data workbook and the excel 3-D column chart....

Directions: Complete questions 1-5 in Excel and paste the answers into a word chapter 8. Question six should be printed out in power point. Make sure that you processing program. The data for...

I got this big assignmnet for Quantitative methods for business i really need help Azimi, Hamida - azihy004 AH Share Comments Delete this page before submission Q-Constructions - building your future...

Assignment2 Lab PracticeDescriptionDataAnalysisusing MSExcel MatchingTrainingtoSoftwareUse Payroll You have the responsibility for making a report to help the company administrators to review the...

WBS for a project. List of resources and allocate resources based on the tasks you identified Resource allocation plan ADDITIONAL CASES INTRODUCTION This document provides four cases in addition to...

3- Why we use LPF rather than BPF or HPF to recover the PAM signal? 4- What is the best order used to recover the original signal. 5- If we used BPF what type of signal will be achieved?

Define and give five examples of off- balance- sheet information. Why should auditors be concerned with such items?

Content Area If the seller permits merchandise to be returned or an allowance to be made, it is customary for the seller to issue a(n) a. return memorandum. b. credit memorandum. c. debit memorandum....

The law of diminishing returns, diseconomies of scale, and factor suitability each provide an explanation for the law of . ( LO7 )

Approximately 14 million Americans are addicted to drugs and alcohol. The federal government estimates that these addicts cost the U.S. economy $300 billion in medical expenses and lost productivity....

As a marketing manager for one of the world??s largest automakers, you are responsible for the advertising campaign for a new energy-efficient sports utility vehicle. Your support team has prepared...

The head of the accounting department at a major software manufacturer has asked you to put together a pro forma statement of the companys value under several possible growth scenarios and the...

Please show work The cost of preferred stock Firms Chat carry preferred stock In their capital mix want to not only distribute dividends Co common stockholders but also maintain credibility in the...

In the hit song "How 'Ya Gonna Keep 'Em Down on the Farm" we listened to this week, Who is hard to keep down on the farm? O The livestock who keep escaping due to poor fencing. O The livestock who...

Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown...