Question 1: Description of the product

                                                            Modernized face masks

            In the modern business world, businesses have encountered huge variations in terms of the needs and preferences of their esteemed customers. The reason for that is because to satisfy the demands of each customer, various factors ought to be taken into consideration.  Some of these factors include the quality of the products being supplied into the market, how affordable they are, the pricing strategies being used, and its ability to be reused, after-sales services provided, and so on.  In the process of understanding and evaluating all these factors, it easier for the management authority of the company to increase its profit margins as a result of making more sales. The same scenario allows the business to enjoy the economies of scale.

            In connection with, considering the evolution of different diseases and viruses, the reason as to why washable and reusable face masks have been recommended is the fact that they have the propensity of enabling users to improve their health status. For instance, the emission of various fumes and its inhalation by human beings is perceived to be reduced as a result of using these masks. Furthermore, due to the fact that it is easy to wash and reuse them, these masks have the proven to enable customers to cut down the expenses that they incur in the process of purchasing new ones (Institute of Medicine (U.S), 20016). 

            The current trend regarding the spread of the COVID-19 virus is also another advantage that arises from the use of these masks. Technically, the reason for recommending the use of these masks is because they are manufactured from activated carbon filters. Using such material to manufacture them not only protects individuals from contracting the deadly COVID-19 virus but also from inhaling dust particles, pollen grains, and smoke from the atmosphere.  After using and rewashing them, the filters still have the ability to filter and trap such particles form the environment.

            Considering rising cases of COVID-19 pandemic, one of the primary objectives of this advertisement entail emancipating the general public about its effectiveness. Ideally, after wearing them, a person can disinfect it using preferred detergents so as to prevent the spread of viruses and poisonous particles from one person to another. Taking into account the differences in shape and size of the users' heads, the masks also has hook and loop straps that can be easily adjusted to fit each one of them. Furthermore, the fabric used to manufacture them can stretch once they are worn on the face. Such a technique makes them be worn comfortably without straining. Another characteristic of these gadgets is that they can be used for long hours because of the easiness to loosen or tighten them using the hooks and loops. 

            In accordance with that, the materials used to make these gadgets are relatively thick. This is advantageous because it prevents them from wear and tear in the process of washing them using disinfectants or wearing them. Therefore, in the process of conducting better market research and employing efficient selling strategies, it will be easier to increase sales as a result of reaching the target groups. Because of the protective measures formulated by the ministry of health, it is believed that both the young and old enjoy the benefits that arise from using such masks (Institute of Medicine (U.S), 2006). With the spread of diseases and viruses, the supply of these masks will be targeting both international and domestic markets.

            Additionally, the use of non-competitive and modern technology in marketing and selling of these products, the management authority of the company will have the ability to meet customer demands, especially the continued spread of viruses. With such an approach, the general public will also be encouraged on how to use them health-wise. That will take into account educating them on the importance of avoiding touching their nose or mouth so as to better protect themselves from viruses, flue, poisonous particles, and so on.

Question 2: Perspectives of the product manager with regard to its innovative demand

            As one of the individuals managing the manufacture and distribution of these products, a demand curve will be utilized in determining whether the whole venture will be profitable or not. With such an approach, generating a demand equation will be valuable in making the management team to decide the most efficient pricing strategies to use. Whether in the short-run or long-run, the variations that will be obtained in terms of the sales made in local or international markets will validate its profitability. According to the research conducted regarding the supply of masks into the market, it has been realized that the majority of producers do concentrate in the supply of generic masks.

             Therefore, in the process of determining the profitability of these gadgets, the intercept (denoted as "a") and the slope/gradient (denoted as "b") will be determined so as to drive the equation of the demand curve.  Computing "b" (the slope of the graph) will assist the management authority to understand the changes that might occur in the process of marketing, distributing, and selling these products. Such changes are perceived to be induced by various factors, particularly price changes (Schindler, 2012). From these perspectives, the price at which the organization will be selling a single unit of the products will be ranging from $25 to $28. Variations in the price of each unit of the products will be based on the market targeted, income levels of customers, how often they will be making purchases, individual choices and preferences, and so on.

            When the price of commodity increases or decreases, the demand for it also decreases until an equilibrium price is maintained. Because of that, my recommendation is that a single unit of the product should be sold at $100 to make it profitable. From the demand curve equation computed, a shift in the demand curve will have to be influenced by the changes in the price of such a commodity. What this suggests is the fact that by plugging the value of "b", which in this case is (-100), an exact value of each one of them will be obtained. Regardless of the market being served, the value obtained will aid in determining the amount demanded by potential customers.

             Ideally, it is possible to realize that the price of each unit of the product can be equivalent to zero. Despite that, in the process of plugging in "a" values, it is found out that the value will rise to 10,000. This estimate is important because it will make the management team to understand the mechanisms to be used to increase prices and sales to expand the business.  On the other hand, by using modern technology, businesses continue to realize more returns and also have a competitive advantage in their industry.  Since price changes have both a positive and negative impact on the number of goods demanded by customers, using a perfect demand equation resolves such uncertainties (Rao, 2009). Therefore, the demand equation for the business will be

                                                Quantity demanded (Q) = 100a-200b

Question 3A:  Price and quantity determination

Table I

MONTHLY DEMAND
PRICE ($)	QUANTITY
3	10,000
9	9,400
14	8,100
19	7,600
24	7,100
29	6,600
35	6,000
41	5,700
49	4,100
55	3,900
60	3,000

 

            Considering the above data, changes in price ultimately result in a shift in demand. This is t imply that when the price of the product increases, demand decreases too. Such changes are also brought about by other forces of demand in the market. Despite that, considering the continuous rise in the rate of contracting viruses, especially COVID-19, variations in price and demand will be relatively at par.  All that is required is a timely supply of these products to the targeted market (Piros & Pinto, 2013).

           

Demand equation

            Using the demand equation formulated above, the quality and the price to be charged for a single unit will induce a huge impact on its demand. Therefore, using our earlier demand equation, we can deduce that

                        Quantity demanded (Q) = a +bp

                                    Where pb is the purchasing price per single unit

            Thus, b (slope) = change in quantity demanded/change in price

                                    = (10,000 -9,400)/ (9-3)

                                        = 100

Computing the value of a, = 100(0) +10,000

                                                = 10,000

                                        This proves that the demand equation that the company will use will be

                                                            Q =10,000-100p

The value of p (price) will be =

                                                = $100

(Graham, 2013)

3B: Point elasticity of demand

Table II

MONTHLY DEMAND
Price ($)	Quantity	Elasticity	Revenue/ returns (p) $	Marginal revenue (MR)
3 (lowest	10,000	-9.8674	19,750	20.300
9	9,400	-9.4532	22,200	21.500
14	8,100	-.80012	25,200	24.900
19	7,600	-7.9650	28,600	29.000
24	7,100	-7.7663	30,040	30.100
29	6,600	-6.9700	33,700	32.000
35	6,000	-5.4531	35,100	34.500
41	5,700	-4.9123	39,350	38.900
49	4,100	-3.6501	44,760	41.650
55	3,900	-2.0546	47,900	44.400
60 (highest)	3,000	-1.4560	52,090	49.450

 

            From the table II above,

                                         n= (10/1000) x (-10)

                                        n = -10   (Kucuk, 2017)

3C: Price-quantity determination

                                        = (% change in q) / (% change in p)

                                        = % change

                                        Therefore, from the demand equation q= 1,000 and p= $ 100

            From the values obtained above, it can be seen that each unit of the product can be sold at an average price of $ 30. Consequently, at equilibrium price, the quantity demanded will be equal to the price charged in the market (Kapil, 2014).

3D: Revenue equation

            At equilibrium price, revenue (R) will be obtained as

                                                R = QP

                                                = 100q – (10/10000q) q

                                                = q (100-0.001q)

3E: Marginal revenue (MR) equation

                                        MR = change in price ( ) / change quantity demanded ( )

                                                = (100-0.001q)

(Piros & Pinto, 2013)

 

Question 4 A: Demand curve

                                     Y-axis

                                    80

                        70

                        60                D2                                         S

                        50         D1

 Price (P)         40                                                      (p2, q2)

                        30

                        20                               (p1, q1)                        

                        10

X-axis

                                             1,500    3,000   4,500    6,000    7,500    9,000   10,500   12,000

                          Quantity (Q)

    Where D = demand and S= supply

 

Question 4 B: Revenue curve

                                      Y-axis

                                    80

                        70

                        60                                                             S

                        50        

 Price (P)         40                                                      (p2, q2)

                        30

                        20                               (p1, q1)                        

                        10                                                     MR                 AR

X-axis

                                             1,500    3,000   4,500    6,000    7,500    9,000   10,500   12,000

                          Quantity (Q)

 

Where AR =average revenue and MR = marginal revenue

Question 5: Analysis and conclusion

    According to the computation conducted above, it can be deduced that for the product of the company to be more profitable, it will be the duty of the management authority to look for efficient product marketing or launching strategies. The data collected, graphs drawn, and equations derived are the best approach to determine how competitive the products will be in the market. Furthermore, to have the propensity of increasing sales, the company needs to ensure that its production levels have been maximized.

    The reason for that timely supply of the products into the market will enable the management authority to respond quickly to customer demands (Schotter, 2009). A change realized in the demand and revenue curve also gives a clear indication of how price and demand are impacted by various forces of demand and supply. This is what assists in determining whether demand or supply will be inelastic or elastic.

 

 

 

 

 

 

 

References

Graham, R. C. (2013). Managerial economics for dummies. Hoboken, N.J: Wiley.

Institute of Medicine (U.S). (2006). Reusability of facemasks during an influenza pandemic: Facing the flu. Washington, D.C: National Academies Press.

Kapil, P. (2014). Elasticity of Demand - Class XII: by Kapil Pingolia. Kapil Pingolia Press

Küçük, S. U. (2017). Visualizing marketing: From abstract to intuitive. Cham : Palgrave Macmillan

Piros, C. D., & Pinto, J. E. (2013). Economics for investment decision makers: Micro, macro, and international economics. Hoboken, N.J. : Wiley

Piros, C. D., & Pinto, J. E. (2013). Economics for investment decision makers: Micro, macro, and international economics. Hoboken, N.J. : Wiley Press

Rao, V. R. (2009). Handbook of pricing research in marketing. Cheltenham, Glos, U.K. ; Northampton, Mass. : Edward Elgar

Schindler, R. (2012). Pricing strategies: A marketing approach. Thousand Oaks, Calif: Sage Publications, Inc.

Schotter, A. (2009). Microeconomics: A modern approach. Mason, Ohio: South-Western Cengage Learning.