Case 2: Good Mag

GoodMag Publisher is trying to determine the correct price for a new weekly magazine. The variable cost of printing and distributing a copy of the magazine is $0.50. They are thinking of charging between $0.50 and $1.30 per copy. The estimated weekly sales of the magazine is 2 million copies if the price is $0.50, 1.2 million copies if the price is $0.90, and 0.3 million copies if the price is $1.30.

Complete the spreadsheet model below to determine the profit for the magazine publisher. Fill in the input values and provide formulas for the output cells.

Question 11

The best formula for demand (in '000 copies) in cell C18, as approximated the polynomial relationship between demand and price, is

=-312.5*B18**2-1562.5*B18+2859.4

=+312.5*B18^2+1562.5*B18+2859.4

=-312.5*B$18^2-1562.5*B$18+2859.4

=-312.5*B18^2-1562.5*B18+2859.4

=-312.5-1562.5*B18+2859.4*B18^2

Question 12

The formula for cell C18 given above can be further improved by

Using function SUM instead of + operators

Removing all the numerical values, putting them into cells and absolute referencing them

None of the given choices

Adding more $ signs to relevance cell references

All of the given choices

Question 13

With magazines demand given as '000 per week, the best formula for profit ($ '000) in cell E18 is

=($B18-D18)*$C18

=(B18-D18)*C$18

=(B18-D18)*C18

=B18*C18-D18*C18

=B18*C18-D18

Question 14

The best formula for advertising revenue ($ '000) per magazine demand ('000 per week) in cell F18 is

=30/C18

=B18*30

=B18/C18

None of the choices given

=E18/30

Question 15

The best formula for total profit ($ '000/week) in cell G18 is

=E18+F18*C18

=E18+F18*C18/1000

None of the given choices

=E18+F18

=(E18+F18*C18)/1000

Question 16

The best price to charge for a copy of the magazine (without considering advertising) is

$0.90

$1.02

$1.00

$0.94

$0.98

Question 17

The best price is best determined using

None of the given choices

Solver

DataTable

Trial and error

Goal Seek

Question 18

In addition to sales revenue, the publisher charges advertisers $30 per thousand copies of magazines sold. With this additional consideration, the best price to charge for a copy of the magazine now is

$1.06

$0.92

$1.00

$0.96

$1.0

Question 19

The best price with advertising considered is less than that without considering advertising because

All of the given choices

Advertisers are subsidising the magazine buyers

Lower price sells more magazines and thus bring in more advertising revenue

Lower price makes advertisers happier

None of the given choices

Question 20

The best price with advertising considered is more than that without considering advertising because

All of the given choices

Higher magazine price brings in more sales revenue

Higher magazine price makes the magazine classier

Higher magazine price makes advertisers happier

None of the given choices