ELEVATE IT, an elevator manufacturing company, designs and manufacturs a new type of exterior elevator OUT-EL....

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"ELEVATE IT", an elevator manufacturing company, designs and manufacturs a new type of exterior elevator "OUT-EL". "OUT-EL" elevators are sold through a construction materials retailer chain. "BUILD-IT” retailer chain has forecasted that demand for the "OUT-EL" elevators will depend on the final retail price p according to the demand curve. Demand D = 200 000 - 2000p The production cost for an "OUT-EL" elevator is TL 30 000. a. If you are the retailer of the "OUT-EL" elevators, what price would you charge for each of "OUT-EL" elevators? (10 pts) b. At this wholesale price, what retail price should the "BUILD-IT" company set? (5 pts) What are the profits for the "ELEVATE IT" company and "BUILD-IT” company at equilibrium? (5 pts) d. If the "ELEVATE IT" company decides to discount the wholesale price by TL 3000, how much of a discount should the "BUILD-IT" company offer to customers if it wants to maximize its own profits? (5 pts) C. e. What fraction of the discount offered by the "ELEVATE IT" company does the "BUILD-IT" company pass along to the customer? (5 pts) "ELEVATE IT", an elevator manufacturing company, designs and manufacturs a new type of exterior elevator "OUT-EL". "OUT-EL" elevators are sold through a construction materials retailer chain. "BUILD-IT” retailer chain has forecasted that demand for the "OUT-EL" elevators will depend on the final retail price p according to the demand curve. Demand D = 200 000 - 2000p The production cost for an "OUT-EL" elevator is TL 30 000. a. If you are the retailer of the "OUT-EL" elevators, what price would you charge for each of "OUT-EL" elevators? (10 pts) b. At this wholesale price, what retail price should the "BUILD-IT" company set? (5 pts) What are the profits for the "ELEVATE IT" company and "BUILD-IT” company at equilibrium? (5 pts) d. If the "ELEVATE IT" company decides to discount the wholesale price by TL 3000, how much of a discount should the "BUILD-IT" company offer to customers if it wants to maximize its own profits? (5 pts) C. e. What fraction of the discount offered by the "ELEVATE IT" company does the "BUILD-IT" company pass along to the customer? (5 pts)

Answer rating: 100% (QA)

a To maximize the profit the retailer should set the price where the demand equals the quantity supplied which occurs at the intersection of the deman... View the full answer