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@alexkpmg said:
To Chris and the GvttftfWhy did you put A on 20?
If the demand is enalastic, doesnt it mean that we can further increase price without our sales decreasin? Thus option 1 favours a penetration policy – so answer CIf the demand is inelastic, that means we can charge more without affecting sales, so skimming pricing should be used not penetration, option A is correct.
Gvtftf
We enter market with low prices an gain a huge share. Than we increase our prices. As the demand is inelsatic – our huge share do not decrease. That is my logic.But if there was such question in BPP – than my logic is trash 🙂
Riskyguy – it’s about lunching a new product. So it doesnt mean that we can “charge more without affecting sales”, We don’t know yet.
@alexkpmg said:
Riskyguy – it’s about lunching a new product. So it doesnt mean that we can “charge more without affecting sales”, We don’t know yet.Inelastic demand means that the demand will not be affected (negatively or positively) by the change in price. So if lower prices give us the same sales demand as higher prices, then why not charge more?
You are right – increase in prices has no impact on sales. But – it s about entering the market – so there is impact on your market share when you state your prices.
q20 was A
i just doubled checked.
if you go to specimen paper for December 14, very similar question was in there.
Oleksandr, i see your logic, dont get me wrong. No kak ustanovlennoye pravilo, inelasticity is for skimming.
@alexkpmg said:
You are right – increase in prices has no impact on sales. But – it s about entering the market – so there is impact on your market share when you state your prices.If the price wont affect sales, how will it affect the market share?
Can someone confirm the answer for the transfer price, that’s been bothering me even throughout my F8 exam today yeeks. And also the Activity based costing figure was it 46.20 or something like that???
@riskyguy said:
If the price wont affect sales, how will it affect the market share?In my understanding – elasticity is applicable only for existing products. If you enter the market, even thoug the demand in not elastic – the price has significant impact on market share.
And what about transfer pricing?
I guess both of these questions.
I think it was 78000 but now after t looking at the paper online I think it was 66000.
I’m confused between whether we were suppose to take the marginal cost or the transfer price.
Transfer Pricing was definitely $78,000.
The transfer price is a ficticious price between the two companies and is netted off at group level, so the $165 is irrelevant at group level which is what the question is asking for.Therefore, the marginal cost of $100 is what it costs A to make. Therefore if B are paying $40 extra for 2,200 units (140-100) that is a decrease of $88,000. Then fixed costs of $10,000 are added back on as they wouldn’t be needed anymore.
Therefore, a decrease of profit of $78,000.
And Gvt: yeah i done that in so rush and just picked 46.25
what about the Economy efficiceny and effectiveness?
James
thanks man!
i think thats how i exactly calculated it..
on the top of the question paper (not in each answer paper ) was it necessary to mark questions which are answered
?Nika
I don’t think I have ever ticked it for any of my exams.
This sitting or the previous sitting in June. So its not to worry about
Answers are now on line
wow looking at the answers on opentuition for section A
i have got at least 26 marks from it
section B i cant remember much anyways so i think hopefully i have done
just didnt understand the answer to Q20 why is it D…
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