community’s annual wellness campaign.

 

1. You are serving as the chair for your community’s annual wellness campaign. A key event is the annual Walk 3k, Run 10k, Ride 20k event. The event is staged entirely by volunteers and the goal is to attract community-wide awareness of getting active as a key step to wellness. In other words, the goal is not to raise money, but to prompt awareness. As the chair, you set a financial goal to break even on the one and only cost of the event, a fitness bag with the community seal and the event motto, “I AM ON THE RIGHT TRACK!”

 

 

The cost of the bags, which must be ordered in batches of 100, are:

Bags/Participants Fixed Cost Variable Cost Total Cost Marginal Cost

0 $1,700 $ – $1,700

100 $1,700 $500 $2,200 ?

200 $1,700 $1,200 $2,900 ?

300 $1,700 $2,700 $4,400 ?

400 $1,700 $5,200 $6,900 ?

500 $1,700 $9,000 $10,700 ?

600 $1,700 $15,000 $16,700 ?

700 $1,700 $23,800 $25,500 ?

800 $1,700 $36,800 $38,500 ?

900 $1,700 $55,800 $57,500 ?

1000 $1,700 $83,000 $84,700 ?

 

2. Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? At what quantity of bags will profits be maximized?

Please select any/all viable approaches below:

Using Qb = F/(MR – AVC) where Qb is the break even quantity, the event would break even at 283 bags.

O Using the profit-maximizing rule, MR ≥ MC, the quantity of bags that will maximize profits is 200 bags.

O Using the profit-maximizing rule, MR > MC, the quantity of bags that will maximize profits is 300 bags.

O The break even quantity cannot be determined in this case.

 

3. Your Best Brand Bike Shorts – BBB Shorts have been flying off the shelf. Your chief economist tells you that during the Covid-19 pandemic, “the taste for bicycling has changed. The price elasticity of demand is much more inelastic. The price elasticity of demand has decreased from -5.76 to -2.70.”

Before the campaign, your price was $240 per pair of BBB Shorts. What should the new price be?

Sample Solution

Another issue is the difficulty in graphically representing smells. One way to represent a smell could be to orally describe it so precisely that it doesn’t get confused with any other smell, but this is quite an arduous task. Writing the chemical formula for the substance is problematic as the formula represents the substance and not the smell itself. Samples of the smell could be stored but these may either vanish over time or change their nature when exposed to certain external factors like heat and humidity. Another important thing to note is that the scent must neither originate from the goods itself nor be functional. Functionality Doctrine again plays a role here and if any smell has a functional use, the registration of which could lead to significant disadvantage to competitors, such smell may be disbarred from registration. However, there is no clear-cut definition for functionality. For example, the smell of lemon for garbage plastic bags; the smell itself can be distinctive, but it can also be functional because it can mask the smell of waste and garbage. Fashion house Chanel’s application to get its iconic perfume Chanel No. 5 trademarked was rejected as it was the essence of the product. The first scent mark to be granted in the US was for a “high impact, fresh, floral fragrance reminiscent of Plumeria blossoms” for “sewing thread and embroidery yarn.” There were four reasons for trade mark to be granted – (1) no one else in the market was producing scented threads and yarns; (2) the scent was an added feature and was neither functional nor inherent to the goods; (3) the scented feature was advertised and promoted; and (4) consumers had come to associate the goods with the manufacturer. Some other smell marks are Sumitomo Rubber Industries Ltd.’s rose-scented tyres and Vennootschap onder Firma Senta Aromatic Marketing’s “smell of fresh cut grass” for tennis balls which has now lapsed. India is yet to set precedence as far as smell marks are concerned.

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