Economics Help!!

James__10

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??

Gran Hermano

Output x Unit Price = Total sales revenue

James__10

Cheers!

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

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.