2. Demand across the two locations - After taking your managerial economics class, you realize that you can probably raise your profits by price discriminating by charging different prices in the two locations. You then break down sales across the two locations. In Laredo: You sold 960 burger meals per week at $10 and 600 meals at $13. In San Antonio: You sold 1440 meals per week at $10 and 1200 meals at $13 A. Using the two prices above, estimate your demand function in Laredo. What would demand be at the optimal price from Q1 B. Using the two prices above, estimate your demand function in San Antonio. What would demand be at the optimal price from Q1?
Q: Suppose there are two firm that is firm 1 and firm 2, each firm has three possible choice as it must…
A: Given, There are two Firms : Firm1 and Firm2Firm 1 has three strategies : -Exit the industry…
Q: C. In proving that there are earnings differentials caused discrimination, what three factors are…
A: When two employees who produce the same amount of output are paid differently on the basis of…
Q: Explain what inflation targeting is. What are the advantages and disadvantages of this type of…
A: The goal of the central bank's monetary policy is to maintain control over the amount of money in…
Q: 3. Kalle has already saved 18 000 euros in his investment account. Suppose he needs to have 32 000…
A:
Q: 2. A monopolist sells tours of a stately Montana home to two groups of consumers, Montanans (M) and…
A: The monopolists are the sellers that maximize their profit at the point when the marginal cost is…
Q: There are two alternatives P,M. With 15% MARR under 20 years study period, which alternative should…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: A natural monopoly exists when Question 3 options: a) the product is sold in its natural…
A: Natural Monopoly: A natural monopoly exists when it is most efficient to have single firm operating…
Q: The cost of a depreciable asset is equal to: a. purchase cost + costs attributable to put the asset…
A: The cost of purchasing and having a depreciable asset is the purchase price of the asset and the…
Q: Which of the following reflects the Dead Weight Loss stemming from the Quota?
A: Quotas are the control or the limit placed on the quantity of the goods and services which are…
Q: QUESTION 11 Suppose the world economy is composed of just two countries: A and B. Each can produce…
A: OC(opportunity cost ) is the cost of next best option. For example - A person can do job A of $20000…
Q: Sabrina has $657 in 2022 and pays an annual interest rate of 22%. How much money will she have at…
A:
Q: The diagram below shows aggregate supply and aggregate demand in the country of Volcania in 2003. If…
A: Aggregate demand consists of consumption, investment, government spending and net export. When…
Q: 1. In analyzing the economic and financial market impacts of the QE announcements, what are the…
A: Quantitative easing (QE) is a monetary policy in which central banks stimulate economic activity by…
Q: T or F Everything we do has its opportunity cost. Why?
A: In economics, it is necessary to choose between several products because resources are limited in…
Q: You are the manager of a monopoly. A typical consumer's inverse demand function for your firm's…
A: In a two-part pricing strategy, the monopoly firm charges a fixed lum-sum fee along with per unit…
Q: Explain why the variables move together on this time trend.
A: Gross Domestic Product (GDP) is defined as the final value of all goods and services produced in an…
Q: 4. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a…
A: In perfect competition , A firm will always produce where Price is equal to marginal cost. This…
Q: If a monopoly hires lobbyists who successfully argue for legal changes favorable to the monopoly,…
A: A monopolist refers to a firm that enjoys considerable market power owing to it being the only…
Q: OAX-0 O&Ps-Ps OC04.05 0000-04
A: The price of a good in any market is determined by the interaction of demand and supply. However,…
Q: EXERCISE 5 Loise spends £20 on tea (T) and coffee (C). Her preferences for these goods can be…
A: Utility function : U = 2T + C2 -C Income = 20 Price of tea = 1.6 Price of coffee = 4 Optimal…
Q: When UVA decreased its tuition from $300 per credit to $250 per credit the enrollment increased from…
A: Elasticity is an economics term that refers to the change in quantity demanded or supplied as a…
Q: Based on your answers to the previous questions, on the following graph use the purple point…
A: Given information In 2020, the price level will be 102. In 2021, if the aggregate demand is ADA,…
Q: Problem 19 A publishing company has a monopoly in the sales of football cards. According to its…
A: Block pricing is when a firm charges different prices for different quantities of the same product…
Q: In a college town, students choose between two providers of wireless internet access. All student…
A: Under a perfectly competitive market: A large number of buyers and sellers operate. All firms…
Q: - Trade surplus leads to the decrease in money supply.
A: Under fixed exchange rate, the central bank peg the domestic currency to foreign currecy say US…
Q: Suppose that the equilibrium real federal funds rate is 2.5% and the target inflation rate is 2.5%.…
A: Taylor rule: R = r* + π + 0.5*(π - π*) + 0.5* (Output gap) where R = nominal federal funds rate r*…
Q: Given the utility function U = 0.4* X₁, 0.25 * X2, 0.35 * X3 and income M = 300, how much will the…
A: The utility function given in the question is for three different preferences segregated by a comma…
Q: 6. Deriving the short-run supply curve The following graph plots the marginal cost (MC) curve,…
A: Shut down point for a firm is where the price level offered to producer is lesser than the average…
Q: 7. Classify each of the following as either a policy instrument or an intermediate target, and…
A: Policy: The actions taken by the government with the intention of influencing the economy of a city,…
Q: Required Information For the five Independent projects given, the capital budget limit is $120,000,…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: What are the important administrative considerations in the capital budgeting process? Discuss one…
A: The method through which a business analyses potential large projects or investments has been…
Q: Your business buys a delivery van for $41,000 on January 4. You estimate that the van can be driven…
A: Depreciation is the normal wear and tear of assets. Salvage value is the future value of asset that…
Q: A natural monopoly arises when the firm’s technology has economies of scale large enough for it to…
A: A natural monopoly is a form of monopolisation that appears to exist because of elevated start-up…
Q: Find the amount needed to be invested now to accumulate the following amount if the money is…
A:
Q: Select the correct answer from the terms provided to complete the sentences below. There are more…
A: An organization's systematic method for assessing possible large-scale expenditures or investments…
Q: A competitive firm produces output given by the production function Q = L0.25 K0.25, whereL and K…
A: Given:Q = L0.25K0.25C = 2L + 4KPrice = 4PHP
Q: kinds of functions: (a) macroeconomic function when regulating inflation and price stability through…
A: Q 2. The central bank has the responsibility to frame and implement monetary policy for country B.…
Q: The price of good X is $7. But each unit of good X produces has an external cost of $1. What is the…
A: Private costs are the expenses incurred by the producer in the course of creating a certain product.…
Q: Write down the extensive form of the game below. For P1, strategies you see below are not the names…
A: Given, Three Players : Player 1, Player 2 and Player 3 Player 1 has four strategies : AA, AB, BA,…
Q: What are the main characteristic/assumption of monopoly market structure?
A: Monopoly: Monopoly means "alone to sell". In a market with a monopoly, there is only one seller of a…
Q: 13. A monopolist faces a constant marginal cost of $1 per unit and has no fixed costs. If the price…
A: A monopolist means an individual, or organization that overwhelms and controls the market for…
Q: To help the economy out of the Great Depression Keynes argued: Group of answer choices A. Wage…
A: The numerous macroeconomic theories and concepts of how aggregate demand significantly affects…
Q: discuss the Fiscal policy of Demand Side and Market-oriented and Interventionist policies of the…
A: Interventions: It refers to the government process that helps the market failure to get clear. It…
Q: Find some prices and income that will lead to a new budget line that intersects the old budget line…
A:
Q: what type of fiscal policy or monetary policy that is currently being implemented
A: The fluctuation in the economic activity is tracked by the business cycle. In an economy, the fall…
Q: Table 15-4 Year 2022 2023 Potential Real GDP $18.1 trillion 18.4 trillion Real GDP $18.1 trillion…
A: The amount of GDP that an economy could produce if its current levels of labour, physical capital,…
Q: The augmented Phillips curve studied in the lecture gives a Positive; Inflation rate; Unemployment…
A: Introduction: The Phillips curve is an economic theory that bears William Phillips' name. Phillips…
Q: The Federal Reserve can use expansionary/contractionary policy to shift the AD curve. Use the AD–AS…
A: Aggregate demand is the sum of Consumption spending , investment spending , government spending and…
Q: Suppose that a firm has the following production function. Also suppose that the only costs the firm…
A: Producer earns maximum profit in the situation of economies of scale. The wage rate of labor…
Q: Annual expenses for two alternatives have been estimated on different bases as follows. End of Year…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Given
Question #1
- Cost function C= 3000+6Q
- Q = 4400 - 200Q
- Q= 1600 P = 14
- Profit= 22400-12600 = 9800
Question #2
- Q=$480 - Laredo
- Q=$1120 - SA
Question #3
- Ed=−1.25 - Laredo
- Ed=−0.55 - SA
- 0.5<0.8− markup index it is charging less. - Laredo
- 0.64<-1/-0.55--markup index it is charging less. - SA
Please answer question number #4 A-C
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
- HOW STARBUCKS USES PRICING STRATEGY FOR PROFIT MAXIMIZATION In January 2020, Starbucks raised their beverage prices by an average of 1% across the U.S, a move that represented the company’s first significant price increase in 18 months. I failed to notice because the price change didn’t affect grande or venti (medium and large) brewed coffees and I don’t mess with smaller sizes, but anyone who purchases tall size (small) brews saw as much as a 10 cent increase. The company’s third quarter revenue rose 25% to $417.8 million from $333.1 million a year earlier, and green coffee prices have plummeted, so what gives? Starbucks claims the price increase is due to rising labor and non-coffee commodity costs, but with the significantly lower coffee costs already improving their profit margins, it seems unlikely this justification is the true reason for the hike in prices. In addition, the price hike was applied to less than a third of their beverages and only targets certain…Sally runs a vegetable stand The following table shows two points on the demand curve for the heirloom tomatoes she sells Price Quantity demanded per week $4.00 100,000 200,000 $2.75 Sally's marginal revenue from lowering the price of tomatoes from $4.00 to $2. 75 is S (Enter your response rounded to two decimal places) Lowering the price trom $4 00 to $2 75 results in an output effect of $and a price effect of S (Enter your responses as whole numbers and include a minus sign i necessary)Comment on the following statement: “In the short run, Mr. Mohammed, a seller in the Fruit& Vegetable Market in Al-Aweer, faces a demand curve that is simply a horizontalline at themarket equilibrium price. In other words, competitive sellers, in this market, face perfectlyelastic demand in the short run.”
- Sally runs a vegetable stand. The following table shows two points on the demand curve for the heirloom tomatoes she sells: Price $3.50 $2.25 Quantity demanded per week 150,000 250,000 Sally's marginal revenue from lowering the price of tomatoes from $3.50 to $2.25 is $ 0.375. (Enter your response rounded to two decimal places.) Lowering the price from $3.50 to $2.25 results in an output effect of $ and a price effect of $. (Enter your responses as whole numbers and include a minus sign if necessary.)3. Johnny Rockabilly has just finished recording his latest CD. His record company's marketing department determines that the demand for the CD is as follows: Price Number of CDs $24 10 000 22 20 000 20 20 30 000 18 40 000 16 50 000 14 60 000 The company can produce the CD with no fixed cost and a variable cost of $5 per CD. a. Find total revenue for quantity equal to 10 000, 20 000, and so on. What is the marginal revenue for each 10 000 increase in the quantity sold? b. What quantity of CDs would maximize profit? What would be the price? What would be the profit? c. If you were Johnny's agent, what recording fee would you advise Johnny to demand from the record company? Why?Omari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Omari initially produced eight trucks, but then decided to increase production to nine trucks. The following graph gives the demand curve faced by Omari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Omari must lower the price from $80,000 to $40,000 per truck. Notice that Omari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial eight engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial eight engines by selling at $40,000 rather than $80,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $40,000. PRICE (Thousands of dollars per fire engine) 220 200 180 160 140 120 100 80 60 40 20 0 Omari 0 1 + 2 3 4 5…
- Shen's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Shen produced three fire engines, but he has decided to increase production to four fire engines. The following graph shows the demand curve Shen faces. As you can see, to sell the additional engine, Shen must lower his price from $125,000 to $75,000 per fire engine. Note that while Shen gains revenue from the additional engine he sells, he also loses revenue from the initial three engines because he sells them all at the lower price. True or False: If Shen's Fire Engines were a competitive firm instead and $125,000 were the market price for an engine, decreasing its price from $125,000 to $75,000 would result in the same change in the production quantity and, thus, total revenue. Should Shen increase production from 3 to 4 fire engines?Omari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Omari initially produced four trucks, but then decided to increase production to five trucks. The following graph gives the demand curve faced by Omari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Omari must lower the price from $105,000 to $90,000 per truck. Notice that Omari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial four engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial four engines by selling at $90,000 rather than $105,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $90,000. PRICE (Thousands of dollars per fire engine) 165 150 135 120 105 Omari 90 75 60 45 30 15 Revenue Lost Demand…he widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $20, $12, $8, $4, and $2 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $8, $12, $20, $32, and $44 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Price Quantity Demanded Quantity Supplied ($ per widget) (widgets) (widgets) $2 $4 $8 $12 $20 $32 $44 In this market, the equilibrium price will be ___ ($) per widget, and the equilibrium quantity will be _____ (#) widgets.
- 3. A local firm produces three types of pizza, for delivery to homes in the area. The owners have completed research, to discover the demand curves for each of the three pizzas. The schedules are shown below: (Quantities are per week). Price Pizza A (Qd) Pizza B (Qd) Pizza C (Qd) 12 800 100 11 840 200 10 880 400 300 9. 920 800 400 8 960 1200 500 1000 1600 600 1040 2000 700 1080 2400 800 Plot the three demand curves, on one graph. a) Calculate the Market demand for Pizza. b) Calculate Price Elasticity of Demand for all three pizzas over the price range £9 to £10. c) For pizza C only, what price must be charged if the firm wishes to maximize its sales revenue? IIexplain your answers in detail and use graphs whenever appropriate: The market for rental cars is very competitive. How would the following developments affect the quantity of car rentals that a typical rental car company wants to supply in the short run? a. With the easing of fears about Covid 19, people are more excited to travel than before. b. Local governments reduce the yearly fee that rental car companies have to pay for their facilities. Note, these fees do not vary with how many cars the company rents. c. Rental car companies have to pay higher wages for their workers. Suppose that initially the market for rental cars is in long-run equilibrium. a. What does the fall in the yearly fee rental car companies have to pay for their facilities do to the profits of a typical rental car company in the short run? b. What will happen to the equilibrium price and quantity of rental cars in the long run? Why? What will happen to the profits of a typical rental car company in the long run?1.i) Assuming you are the managing director of a firm that produces goods: A,B and C .The price elasticity of demand for A is 1.2, for B it is 1.oo and C is 0.75. It is known that he's firm is experiencing serious cash flow problems and you have to increase total revenue as soon as possible. If you were in a position to set the prices for these goods, what would be your pricing strategy for each product ii) price falls from N$ 16 to N$ 12 per bottle and demand rises from 200 to 300 per bottle.calculate the PED using midpoint formula Output prices average (total)cost Total cost marginal cost Total profit/loss 10 10 -108 20 10 4 -48 30 10 5 3 40 10 6.20 40 50 10 8 60 60 10 10 60 2. i) fill in the gaps ii)in which market structure doess Johnson Electronics (Pty)Ltd operate? iii)what level of output maximizes the firms profit