ECON600 Assignment 3

# ECON600 Assignment 3 - Promotional DVDs 1 Promotional DVDs for Television Station Eric D Jackson Promotional DVDs 2 Managerial Economics 600

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Promotional DVDs 1 Promotional DVDs for Television Station Eric D. Jackson

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Promotional DVDs 2 Managerial Economics 600 Instructor Dr. Frederic Bouchet April 13, 2011 Abstract A television station is considering promotional DVDs from two different suppliers. If the station wants to give the DVDs away, we must determine how many DVDs to order and from which supplier is cheaper. To maximize the stations profits of DVDs, we must determine the sale price of each DVD and how many DVDs the station needs to order and from which supplier with the cheaper DVD price.
Promotional DVDs 3 Promotional DVDs for Television Station For this television station to give away any DVDs, we must identify the demand for the product. The quantity demand for this television station is 1600 units. Supplier A

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Promotional DVDs 4 will charge the station a set-up fee of \$1,200 plus \$2 for each DVDs: supplier B has no set-up fee and will charge \$4 per DVD (Samuelson and Marks, pg. 52). The station estimates its demand for the DVDs to be given by Q=1,600 – 200P, where P is the price
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## This note was uploaded on 04/22/2011 for the course ECON 600 taught by Professor Unk during the Spring '11 term at American Public University.

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ECON600 Assignment 3 - Promotional DVDs 1 Promotional DVDs for Television Station Eric D Jackson Promotional DVDs 2 Managerial Economics 600

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