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Lecture 5 - PROFIT SCENARIOS SALES = Total Revenue = P Q...

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9/9/09 PROFIT SCENARIOS SALES = Total Revenue = P * Q PROFIT = SALES – COSTS = % Marketing Margin But what if sell or license technology, not tomatoes?
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9/9/09 ELASTICITIES (Own ) Price: dQ/dP* P/Q (<0) Price Flexibility: 1 /Price Elasticity (Cross) Price: dQ T /dP E *P E /Q T > 0 Substitute < 0 Complement Income: dQ/dY*Y/Q > 0 normal good Other Factors Over Time: Population Growth Quality Production Increases
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9/9/09 ESTIMATES BE CAREFUL OF UNITS! Philippines: Y= .16, OP = -.07 (Wholesale) Korea: Y= .76, OP=-.024 India: Ali Y = .2 - .4, av. .4 OP = -2 - .8, av. -.5
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9/9/09 Price tomatoes (Rs/MT) Quantity tomatoes (MT) Your Projected Market Share: 1st Year 5th Year Loss Reduction (%) Quality Improvement SCENARIOS
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9/9/09 EXAMPLE Wholesale Price: Rs 8,000/MT Total Quantity (98-99): 8,270 MT Market Share: 1st Year – 5 %
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