Math Problem - Speech or Presentation Example

and Section # of Marketing Math Assignment Question Overheads $100,000 $200,000 Selling Price/unit$40$40Variable Cost/ Unit$10$10Contribution Margin$30$30Break-even Point (in Units)3,3336,667The contribution margin is the amount that is used to cover the overheads and then contribute towards the profits. In this case, keeping the contribution margin constant, the increase in overheads increases the number of units required to breakeven. In the above scenario, the 100 percent increase in overheads caused the breakeven units to increase from 3,333 units to 6,667 units.

Therefore, the consultants’ warning is true and accurate.Question 2OldNew% Change in Quantity Demanded2015-0.25% Change in Price801601PEoD  -0.25Taking the absolute value, the price elasticity of demand is 0.25. This implies that the demand for her service is price inelastic. The increase in price has very little influence on the demand of her services. Therefore, she could continue to raise the prices until her demand becomes price elastic.Question 3Therefore, the equilibrium price is $30 and the equilibrium quantity is 20 units.

Question 4There are two methods of calculating mark-up:Markup on cost price = (Markup/Cost price)*100Markup on selling price = (Markup/Selling Price)*100Cost Price$500Selling Price$750Markup (or Profit)$250Markup based on CP50%Markup based on SP33.33%Therefore, I believe that the advertisement slogan is unethical since the company sells the jewelry for a profit of more than 33% as proven in the above calculations. Works CitedSamuelson, P. A., Nordhaus W.D. Economics. McGraw-Hill (2001)