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Economics Help!!

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  • 08-04-2014 2:50pm
    #1
    James__10
    Registered Users Posts: 1,526 ✭✭✭


    This is a case study:

    Finchfield Cycles is an Irish Commerical enterprise based in Cork. Five years ago sales were 10000 a year. Today they are 20000. Despite selling at €400 each, there is a long waiting list for the bicycles due to a bottleneck in production.

    The companys sales director has been researching different pricing strageties. He estimates they could sell 25000 a year and not have to drop there prices. He estimates that the company could sell 30000 a year at €360 but a move to 35000 a year would have to see pirces drop to €320. 40,000 sales a year would probably need a price of €280.

    Questions

    1. From the data, assuming no bottlenecks in production and no differential pricing, what does the sales director believe would be total sales at a price of:

    a. € 400
    b. € 360
    c. € 320
    d. € 280

    I have to have Output, Selling Price and Sales Revenue.

    So for a) So far for €400 I have Output = 25000 Selling Price = 400 but I don't know what the sales revenue is??


Comments

  • Options
    #2
    Gran Hermano
    Closed Accounts Posts: 9,330 ✭✭✭Gran Hermano


    Output x Unit Price = Total sales revenue


  • Options
    #3
    James__10
    Registered Users Posts: 1,526 ✭✭✭James__10


    Cheers!

    Discuss the economic advantages of falling costs of production for the Irish economy?


  • Options
    #4
    LostBoy101
    Registered Users Posts: 2,369 ✭✭✭LostBoy101


    James__10 wrote: »
    Cheers!

    Discuss the economic advantages of falling costs of production for the Irish economy?

    • Increased in the quantity of goods sold which increases total revenue for firms
    • Cheaper raw materials for firms
    • Increased competition which gives consumers more choice and better value for money
    Thats off the top of my head but I would check past exam papers marking scheme to get a fair idea of where the marks are awarded.


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