Economics Assignment: Quantitative Methods, Break-Even, and Revenue

This assignment delves into quantitative methods in economics, exploring break-even analysis and revenue optimization. Question 1 examines the profitability of different motorcycle types, determining break-even points and comparing profits for each model. Question 2 analyzes the impact of price changes on airline ticket revenue. The solutions include calculations based on given data and highlight assumptions and limitations, such as selling prices and random number selection. The assignment aims to apply quantitative techniques to real-world economic scenarios, providing insights into business decisions and market dynamics.

Quantitative methods with Economics

TABLE OF CONTENTS
QUESTION 1...................................................................................................................................1
4. Summarizing...........................................................................................................................1
QUESTION 2...................................................................................................................................1
7. Summarizing..........................................................................................................................1

QUESTION 1
4. Summarizing
a. The point of intersection would be in each type of motorcycle would be 18532, 28985 and
24644 respectively which is telling that this could be the line of break even point. This point is
telling that is neither profits nor loss situation for company. The point at which total cost and
total revenue would be equal. This is the intersection point would be than termed to as equal. So
in step 1 the break even point which we have computed was equal to that which is taken out in
step 2.
b. the type 1 of motorcycle would be most profitable as the profits of catalyst engine parts would
be coming to about 1698 which is highest among all of them. While on the other hand type 2,
motorcycle which is platinum power engine parts would be that of lowest which is about 554. so
this type which is 1 is easiest to make out the profits.
c. In the following calculation we have assumed 2 things:
 From the range given that of selling price we have assumed selling price per units to be
highest among all like in type 1 it is 1200 in type 2 it is 1600 and in type 3 it is 1400.
 Another assumption would be that of total units of motorcycle sold which we have
assumed to be 22 in each type.
 So all these assumptions could be defined to as limitation of our calculation.
QUESTION 2
7. Summarizing
a. If the price of airlines ticket would be reduced by $25 then equilibrium price would be shifting
as the price would be reducing while quantity sold would be increasing as price is decreasing
then quantity sold would be increased. While revenue would also be increasing due to increase in
sales or quantity sold.
b. As airlines is getting profit out of reduce in price than they should be getting their price as
reduced only so that they are having increase in their revenue.
c. As we were giving to choose from the random numbers of 0.1 and 0.9 inclusive so this
choosing from random methods could be taken to as assumption and limitation of our
calculation.
All the calculation would be then done according to this random numbers only so this would be
affecting our whole further calculations as well.
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