A producer of a new range of energy drink introduces their product at R25 per can. After a month of sales, they introduce a special of R 40 for two cans. A month later they sell the product at the original introductory price. They subsequently
introduce another special after another month of R 45 for two. After a month of sales, they re-introduce the onginal special
of R40 for two and this special is kept on-going for numerous months thereafter. Use price elasticity theory to show why.
ceteris paribus, the producer settles at the initial special of R 40 for two. In your discussion, include a comment on the
type of price elasticity observed with the demand for this energy drink at these prices.

This exercise illustrates that poor quality can affect schedules and costs. a manufacturing process has 130 customer orders to fill. each order requires one component part that is purchased from a supplier. however, typically, 3% of the components are identified as defective, and the components can be assumed to be independent. (a) if the manufacturer stocks 130 components, what is the probability that the 130 orders can be filled without reordering components? (b) if the manufacturer stocks 132 components, what is the probability that the 130 orders can be filled without reordering components? (c) if the manufacturer stocks 135 components, what is the probability that the 130 orders can be filled without reordering components?