Having trouble... need work shown please!

MAR 200 - Pricing Exercise MAR 200 - Pricing Exercise Part 2 Part 1 Company Objectives and Pricing Methods Customer Considerations - Elasticity of Demand Customers judge value by the benefits of what they buy relative to the cost of that item. Pricing decisions are then very critical to delivering value to the customer. - The price we calculated in the previous problem, along with the Break Even volume, has been filled in below. - If I raise the price of the tote, I assume that the demand will fall; if I lower the price of the tote, I assume the demand will rise. Profit Orientation - Cost Base Pricing Variable Cost = $30 per tote Fixed Cost = $4,500 (annually) Whole Market Estimate is 76,000 (see Rochester census data for number of females between the ages of 18 and 65) of which I would like to get 10% What would the selling price of the tote be if I wanted to get a 50% target profit - I would like to know if I will still make a profit at the higher or lower prices, because I know that my variable costs will change depending on the volume. What would the Break Even volume be, i.e., how many would I have to make and sell before I began to make money. - Calculate the remaining rows and columns in the chart below to see what my total costs and profits will be at each price point. (1) Price Total Revenue (1) X (3) (5) Total Costs* (6) Profit (4)-(5) Customer Orientation - Value Pricing The cost based pricing gives me a starting point. There are other pricing considerations however. Consumers could use the price of this tote to judge its quality is it priced appropriately for a custom item? If I change the price what would the effect be on my Break Even Volume? (2) (3) Unit Expected Demand Unit or Sales Demand Needed to or Sales at Break Given Even Price 6,000 6.800 145 7,600 8,400 9,200 $81 $71 $61 $51 $41 Competitor Orientation - Competitive Pricing What is the competition like for totes and purses of this type is it oligopolistic, monopolistic, or pure competition? How would this affect how we might set a price. Note: Assumes fixed costs of $4,500 and constant unit variable costs of $30