A company produces advanced analytic software for computer simulations called ZZZ. Based on an analysis of product sales over 2 year, A company estimates the demand for ZZZ to be: Qz=1200 - 8Pz+4Ps, where Qz denotes units sold of ZZZ software. Pz denotes ZZZ's price, and Ps denotes the price of a best selling statistical software package.
1) Pz=$200 and Ps=$300. What is the predicted demand for ZZZ?
I think the answer is 800.
2) The price Ps has been unchanged ($300) during the last 6 months. Given this information, write down the equation for ZZZ demand curve ( with Qz as the left side variable) Also determine its inverse demand curve (with Pz as the left side variable)
3) An industry analyst says that demand for ZZZ is not very sensitive to change in the price of the statistical software package Ps ( This package does perform some of the same operations as ZZZ, however, not as quick or convenient) Assess this contention. Do you agree or disagree?
4) The marginal cost of ZZZ is negligible. The company incurred significant costs in developing the product for market (estimated to be about $35000). Usingthe estimated demand curve of part 2, determine the optimal price and output quantity for ZZZ.
1) Pz=$200 and Ps=$300. What is the predicted demand for ZZZ?
I think the answer is 800.
2) The price Ps has been unchanged ($300) during the last 6 months. Given this information, write down the equation for ZZZ demand curve ( with Qz as the left side variable) Also determine its inverse demand curve (with Pz as the left side variable)
3) An industry analyst says that demand for ZZZ is not very sensitive to change in the price of the statistical software package Ps ( This package does perform some of the same operations as ZZZ, however, not as quick or convenient) Assess this contention. Do you agree or disagree?
4) The marginal cost of ZZZ is negligible. The company incurred significant costs in developing the product for market (estimated to be about $35000). Usingthe estimated demand curve of part 2, determine the optimal price and output quantity for ZZZ.