p=200-2q, re q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiate arately with each person who joins the club and can therefore charge individual prices. This manager has of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee as many rounds as he wants at $20, which is the marginal cost his round imposes on the Club. What mbership fee would maximize profit for the Club? The manager could have charged Joe a single price per vw much extra profit does the Club earn by using two-part pricing? profit-maximizing membership fee (Elis (Enter your response as a whole number..
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- ABC Co, a store that sells various types of sports clothing and other sports items, is planning to introduce a new design of Arizona Diamondbacks’ baseball caps. A consultant has estimated the demand curve to be Q = 2,000 - 100P where Q is cap sales and P is price. How many caps could ABC sell at $6 each? How much would the price have to be to sell 1,800 caps? Suppose ABC were to use the caps as a promotion. How many caps could ABC give away free? At what price would no caps be sold? Calculate the point price elasticity of demand at a price of $6.Sam is a personal trainer working for private clients. He just moved from California to a city on the East Coast and he needs to create his newclient base. A colleague told him that on the East Coast personal trainers face an inverse demand P = 300 – 20Q, that is when working with Qclients, a personal trainer can find one more client willing to pay P = 300 – 20Q for a weekly training session. Sam’s opportunity cost of a twohour training session is MC = 10Q. We make the heroic assumption that clients are infinitely divisible so that we can use calculus to solveSam’s profit maximizing problems.At first, Sam doesn’t read East Coasters that well and he can’t tell who is willing to pay more money for training sessions. Hence, he chargesall clients the same price.a) In part naively in part to get to know more people, Sam decides to sign up any customer willing to pay a price at least as high as his marginalcost of time. That is, Sam behaves like a price-taker. How many clients does he…You are in the market for a new couch and havefound two advertisements for the kind of couchyou want to buy. One seller notes in her ad that sheis selling because she is moving to a smaller apartment, and the couch won’t fit in the new space.The other seller says he is selling because the couchdoesn’t match his other furniture. Which seller doyou expect to buy from? Why? ( Hint: Think whowould be the more motivated seller.)
- Ayana is pitching an idea for a startup company that makes and sells solar-powered phonechargers (C). Her market research has found that consumer demand for this product can beexpressed as a function of the price of the charger itself (PC), the price of phones (PF), andthe consmer’s income (I). Consumer demand can be described by the function C(PC, PF, I) =(i−10PC)/ (PF) Suppose her chargers come in all different capacities to meet any quantity demanded, so youdon’t need to worry about restricting C to whole numbers for this problem. (a) Does this product satisfy the law of demand?Explain.3.In Avenger City, there are various fried chicken consumers withFea es like Captain America, Thor and Black panther. Consumers with Characteristics of Captain America has a demand function for fried chicken with DCA(p)=10-2p, while Thor is DT(p)=5-p and Black Panther is DBP(p)=20-4p. The number of consumers with characteristics such as Captain America is 50, Thor 100 and Black Panther 150. If the price of Fried Chicken is $5, then:A. What is the total demand for fried chicken for consumers withFeatures like Captain America?B. What is the total demand for fried chicken for consumers withFeatures like Thor?C. What is the total demand for fried chicken for consumers withFeatures like Black Panther?D. What is the total demand at market level for fried chicken whenthe price is $5? If the price of fried chicken is $10, then:A. What is the total demand for fried chicken for consumers withFeatures like Captain America?B. What is the total demand for fried chicken for consumers withFeatures…Ayana is pitching an idea for a startup company that makes and sells solar-powered phonechargers (C). Her market research has found that consumer demand for this product can beexpressed as a function of the price of the charger itself (PC), the price of phones (PF), andthe consmer’s income (I). Consumer demand can be described by the function C(PC, PF, I) =(i−10PC)/ (PF) Suppose her chargers come in all different capacities to meet any quantity demanded, so youdon’t need to worry about restricting C to whole numbers for this problem. (a) Does this product satisfy the law of demand?Explain. (b) Calculate consumers’ income elasticity as a function of the parameters. (c) Anaya is targeting a market whose income is expected to double over the next five years.Explain whether she should expect the demand for chargers to increase or decrease, andby how much, using the language of normal, inferior, luxury, and necessity goods. (d) Calculate the cross-price elasticity ofCwith respect toPF. (e)…
- 34. If Hager's total utility from consuming falafel increased at a constant rate, no matter how mạny falafel Hager consumed, what would Hager's demand curve for falafel look like?Shell has over 13,000 gas stations in the United States. In addition to gasoline, the gas stations also sell convenience items, such as snacks, non-alcoholic beverages, wine, beer, and hot food. Suppose you work for a gas station and your boss asks you to develop a pricing strategy for bottled local wine. The demand function is ? = 100 – 4?, where ? is the monthly quantity demanded of the bottled wine and ? is the price of the bottled wine. The marginal cost per bottle of wine is $5. Complete the following tasks: 1) (Calculating) In the worksheet “Q2 Calculations” of the provided Excel file, enter formulas in columns B-D to calculate Q (quantity demanded), MC (marginal cost), and MR (marginal revenue). Please round your results to one decimal place. Note that the inverse demand function is ? = 25 − 0.25? and that the MR function can be derived from the inverse demand function using the formula introduced in Module 5. You may find it helpful to review the Excel file for Chapter 11.GameZone, a video games store, is considering the best way to price two new games – a first-person shooter (FPS) and a racing game. There are four types of consumers that might buy the games with roughly equal numbers of each type, and their willingness to pay (WTP) for each game is detailed in the table below (assume that the willingness-to-pay for a second game of the same type is zero). How should Gamezone price the two games separately to maximise revenue? How should Gamezone price a bundle of both games to maximise revenue? Is there an alternative (involving bundling) that generates more revenue than either single prices or a bundle alone? Under what condition/s is bundling likely to increase profits for a firm? Consumer Type WTP for FPS game WTP for racing game A $120 $70 B $70 $120 C $160 $10 D $10 $160
- Tom had an "absolute need" for web help and therefore was ready to "pay anything" to get it. If this were true, what shape would his demand curve have? Why isn't this realistic?6. Exercise 4.6 An econometrician hired to analyse a local golf course has determined that there are two types of golfers, the regular and the occasional. The annual demand for games from regular players is given by QH = 24 - 0.3P, where P is the price of a round of golf. On the other hand, the annual demand for occasional items is given by Q° = 10 - 0.1P. The marginal cost and the average total cost per item are equal to €20. a) If you could distinguish between regular and casual players, what price would be set for each type? How many games would each type of player play? How much profit could the golf course generate? Represent graphically. b) As an alternative to the discrimination of third degree prices, those in charge consider a double tranche rate according to which the members can play as many games as they wish at a price of € 20 per game. How much profit will the golf course generate if it charges all players the same annual fee for becoming a member of the club? What if you…Lorena's income and the cost of other types of entertainment-in particular, how much it costs to go see a movie instead of playing golf. The three demand schedules in the table below show how many rounds of golf per year Lorena will demand at each price under three different scenarios. In scenario D1, Lorena's income is $50,000 per year and movies cost $9 each. In scenario D2, Lorena's income is also $50,000 per year, but the price of seeing a movie rises to $11. And in scenario D3, Lorena's income goes up to $70,000 per year, while movies cost $11. D1 Scenario D2 D3 Income per year $50,000 $50,000 $70,000 Price of movie ticket $9 $11 $11 Quantity Demanded Price of Golf $50 15 10 15 $35 25 15 30 $20 40 20 50 Instructions: Round your answers to 2 decimal places. If you are entering any negative numbers be sure to include a negative sign () in front of those numbers. a. Using the data under Di and D2, calculate the cross elasticity of Lorena's demand for golf at all three prices. (To do…