Eco 550
QD = fðP, PS, PC, Y, A, AC, N, CP, PE, TA, T=S …Þ [2.1]
where QD = quantity demanded of (e.g., Toyota Prius or Chevy Volt)
P = price of the good or service (the auto)
PS = price of substitute goods or services (e.g., the popular gasoline-powered
Honda Accord or Chevy Malibu)
PC = price of complementary goods or services (replacement batteries)
Y = income of consumers
A = advertising and promotion expenditures by Toyota, Honda, and General
Motors (GM)
AC = competitors’ advertising and promotion expenditures
N = size of the potential target market (demographic factors)
CP = consumer tastes and preferences for a “greener” form of transportation
PE = expected future price appreciation or depreciation of hybrid autos
TA = purchase adjustment time period
T/S = taxes or subsidies on hybrid autos
QS = fðP, PI , PUI, T, EE, F, RC, PE, T=S …Þ (Equation 2.2) where Qs = quantity supplied (e.g., of domestic autos)
P = price of the autos
PI = price of inputs (e.g., sheet metal)
PUI = price of unused substitute inputs (e.g., fiberglass)
T = technological improvements (e.g., robotic welding)
EE = entry or exit of other auto sellers
F = accidental supply interruptions from fires, floods, etc.
RC = costs of regulatory compliance
PE = expected (future) changes in price
TA = adjustment time period
T/S = taxes or subsidies
Product A is more riskier as Std dev / mean = 0.8 and for Product B it is 0.5 thus A is more riskier
Not yet rated Anonymous - 1 hour later
fot this we will calculate the coefficient of variation of both the product. coefficient of variation= SD/meanx100 coefficient of variation of Product A= 40000/50000x100= 80% coefficient of variation of Product B= 12500/250000x100= 5%
higher the coefficient of variation higher will be the risk, therefore Product A is more
where QD = quantity demanded of (e.g., Toyota Prius or Chevy Volt)
P = price of the good or service (the auto)
PS = price of substitute goods or services (e.g., the popular gasoline-powered
Honda Accord or Chevy Malibu)
PC = price of complementary goods or services (replacement batteries)
Y = income of consumers
A = advertising and promotion expenditures by Toyota, Honda, and General
Motors (GM)
AC = competitors’ advertising and promotion expenditures
N = size of the potential target market (demographic factors)
CP = consumer tastes and preferences for a “greener” form of transportation
PE = expected future price appreciation or depreciation of hybrid autos
TA = purchase adjustment time period
T/S = taxes or subsidies on hybrid autos
QS = fðP, PI , PUI, T, EE, F, RC, PE, T=S …Þ (Equation 2.2) where Qs = quantity supplied (e.g., of domestic autos)
P = price of the autos
PI = price of inputs (e.g., sheet metal)
PUI = price of unused substitute inputs (e.g., fiberglass)
T = technological improvements (e.g., robotic welding)
EE = entry or exit of other auto sellers
F = accidental supply interruptions from fires, floods, etc.
RC = costs of regulatory compliance
PE = expected (future) changes in price
TA = adjustment time period
T/S = taxes or subsidies
Product A is more riskier as Std dev / mean = 0.8 and for Product B it is 0.5 thus A is more riskier
Not yet rated Anonymous - 1 hour later
fot this we will calculate the coefficient of variation of both the product. coefficient of variation= SD/meanx100 coefficient of variation of Product A= 40000/50000x100= 80% coefficient of variation of Product B= 12500/250000x100= 5%
higher the coefficient of variation higher will be the risk, therefore Product A is more