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Category > Management Posted 03 Jun 2017 My Price 5.00

Blue Skies Aviation is a manufacturer of small single-engine airplanes

Blue Skies Aviation is a manufacturer of small single-engine airplanes. Thecompany is relatively small and prides itself on being the only manufacturerof customized airplanes. The company’s high standard of quality is attributedto its refusal to purchase engines from outside vendors, and it preserves itscompetitive advantage by refusing to sell engines to competitors. To achievemaximum efficiencies, the company has organized itself into two divisions: adivision that manufactures engines and a division that manufactures airplanebodies and assembles airplanes. Demand for Blue Skies’ customized planes isgiven by P  610,000  2,000Q. The cost of producing engines isC e (Q e )  4,000Q 2 e , and the cost of assembling airplanes is C a (Q)  10,000Q.What problems would occur if the managers of each division were givenincentives to maximize each division’s profit separately? What price shouldthe owners of Blue Skies set for engines in order to avoid this problem andmaximize overall profits?18. As a manager of a chain of movie theaters that are monopolies in theirrespective markets, you have noticed much higher demand on weekendsthan during the week. You therefore conducted a study that has revealedtwo different demand curves at your movie theaters. On weekends, theinverse demand function is P  15  0.001Q; on weekdays, it is P  10 0.001Q. You acquire legal rights from movie producers to show theirfilms at a cost of $20,000 per movie, plus a $2 “royalty” for each movie-goer entering your theaters (the average moviegoer in your marketwatches a movie only once). Devise a pricing strategy to maximize yourfirm’s profits.

Answers

Alpha Geek
(8)
Status NEW Posted 03 Jun 2017 07:06 AM My Price 5.00

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file 1496476729-Answer.docx preview (321 words )
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