Ozzy's is a restaurant well known in a metropolitan in South Africa called Mangaung for its...
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Ozzy's is a restaurant well known in a metropolitan in South Africa called Mangaung for its giant burger. The restaurant has three branches. The first branch is in the Central Business District (CBD) of Bloemfontein, the second branch is in one of the leafy suburbs of Bloemfontein called Langenhoven park 2 (LHP) and the other is situated a bit out of Bloemfontein in Botshabelo (BOTS). The marginal costs and the price elasticity of demand for this giant burger for the three branches vary by seasons allowing for different pricing rules. The key aspect with Ozzy's is that all its branches enjoy market power. In fact, the marginal 1+Ep revenue (MR) for each of the branches can be represented by the expression: MR = P where P = price of the giant burger, and Ep = own price elasticity of demand for the branch's giant burger. A summary of Ozzy's information for two seasons is provided as follows: Winter Summer Marginal cost 20 20 CBD LHP Price elasticity Marginal Price elasticity Marginal of demand cost of demand cost -4.1 25 -1.5 30 30 30 -2 -5.1 BOTS Price elasticity of demand -3.6 -3.6 The profit-maximizing mark-up factor for the CBD branch in winter is R[....], the profit-maximizing mark- up factor for the CBD branch in summer is R[....], the profit-maximizing mark-up factor for the BOTS branch in summer is R[....], the profit-maximizing mark-up factor for the LHP branch in winter is R[....], the profit- maximizing mark-up factor for the LHP branch in summer is R[....]. (Note: all your answers must be presented to two decimal places. Use a dot "." instead of a comma ",") [3] Ozzy's is a restaurant well known in a metropolitan in South Africa called Mangaung for its giant burger. The restaurant has three branches. The first branch is in the Central Business District (CBD) of Bloemfontein, the second branch is in one of the leafy suburbs of Bloemfontein called Langenhoven park 2 (LHP) and the other is situated a bit out of Bloemfontein in Botshabelo (BOTS). The marginal costs and the price elasticity of demand for this giant burger for the three branches vary by seasons allowing for different pricing rules. The key aspect with Ozzy's is that all its branches enjoy market power. In fact, the marginal 1+Ep revenue (MR) for each of the branches can be represented by the expression: MR = P where P = price of the giant burger, and Ep = own price elasticity of demand for the branch's giant burger. A summary of Ozzy's information for two seasons is provided as follows: Winter Summer Marginal cost 20 20 CBD LHP Price elasticity Marginal Price elasticity Marginal of demand cost of demand cost -4.1 25 -1.5 30 30 30 -2 -5.1 BOTS Price elasticity of demand -3.6 -3.6 The profit-maximizing mark-up factor for the CBD branch in winter is R[....], the profit-maximizing mark- up factor for the CBD branch in summer is R[....], the profit-maximizing mark-up factor for the BOTS branch in summer is R[....], the profit-maximizing mark-up factor for the LHP branch in winter is R[....], the profit- maximizing mark-up factor for the LHP branch in summer is R[....]. (Note: all your answers must be presented to two decimal places. Use a dot "." instead of a comma ",") [3]
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Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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