Consider a market with just one business and high obstacles to entry, where P = 100 - 2Q and MR = 100 - 4Q describe the demand curve. Assume that overall expenses are zero (hence, marginal cost is equal to 0). What would the going rate be in this marketplace? P = 20 P = 30 P = 50 P = 40
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Consider a market with just one business and high obstacles to entry, where P = 100 - 2Q and MR = 100 - 4Q describe the demand curve. Assume that overall expenses are zero (hence, marginal cost is equal to 0). What would the going rate be in this marketplace?
P = 20
P = 30
P = 50
P = 40
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- Take a market with just one business and high obstacles to entry, where P = 100 - 2Q and MR = 100 - 4Q describe the demand curve. Assume that overall expenses are zero (hence, marginal cost is equal to 0). What would the going rate be in this marketplace? P = 20 P = 30 P = 50 P = 40Round off your final answer to whole #. A company produces and sells a consumer product and is able to control the demand by varying the selling price. The approximate relationship between price and demand is p=45 + 2700/D - 5000/D2 for D > 1 The company is seeking to maximize its profit. The fixed cost is $1,000 and the variable cost is $38 per unit. What is the number of units that should be produced and sold each month to maximize profit?There are two firms, wholesaler (W) and retailer (R). W supplies product to R, who then sells it to final consumers. W has a constant marginal cost of production equal to 0.2. W charges per unit price p to R, who has no other cost besides this. First, W chooses its price p. Then after observing p, R chooses the final consumer price x. Consumer demand for the final product is given by D(x)=1-x. Find the quantity of the final product sold in this market.
- Consider PNW Airlines, an airline focused on transporting cargo. Their fleet is composed of four cargo airplanes. Total cargo capacity of the fleet is 100,000 cubic feet. The monthly cost of maintaining and operating the fleet is $50,000. Market research indicated that the demand curve for cargo capacity is d=300,000-25,000p where d is the demand across all segments and p is the transport price per cubic foot. What is the price that maximizes profit for PNW Airlines if all the demand comes from a single segment?The final output for a product is comprised of one unit of input from both a wholesaler and a retailer. There is only one wholesaler but there are two retailers. The wholesaler has marginal cost of c=10. The retailers have marginal costs of 0. Final demand is given by P = a – bQ, where a=100 and b=3. The wholesaler can set a two-part tariff, with a fixed-fee F and a per unit fee w. b) Now assume that the retailers are Cournot competitors. Again the wholesaler sets a fixed-fee and a per-unit charge. What is the output level of the retailers,given that the wholesaler has set a per-unit charge of w? What is the maximum fixed fee F that the retailers would be willing to pay?The final output for a product is comprised of one unit of input from both a wholesaler and a retailer. There is only one wholesaler but there are two retailers. The wholesaler has marginal cost of c=10. The retailers have marginal costs of 0. Final demand is given by P = a – bQ, where a=100 and b=3. The wholesaler can set a two-part tariff, with a fixed-fee F and a per unit fee w. a) If the retailers are Bertrand competitors, what is the fixed-fee and w that will maximise profits for the wholesaler? How does this compare to the output and price level of a vertically-integrated firm? b) Now assume that the retailers are Cournot competitors. Again the wholesaler sets a fixed-fee and a per-unit charge. What is the output level of the retailers,given that the wholesaler has set a per-unit charge of w? What is the maximum fixed fee F that the retailers would be willing to pay?
- Ticket Price, Cost ($) 10 8 00 D₁ = Dx+DA MC = ATC MRT 20 28 38 10 0 Adult Tickets DK 6 4 MC = ATC MRK Children's Tickets 20 20 1. The Figure above describes demand and cost conditions facing the Salinas Cinema-Plex. Note that marginal costs are constant ($). The demand for Cinema-Plex movie tickets by adult patrons is given by DA and by child patrons Dk. a) Calculate total revenue from ticket sales IF the Cinema-Plex did NOT practice 3rd degree price discrimination, but rather charged a single price to adult and child patrons. b) Calculate the total number of tickets sold if the Cinema-Plex DID practice 3rd degree price discrimination. c) Calculate the change in consumer surplus (CS) received by adult patrons if the Cinema-Plex shifted from a single price to a 3rd degree price discrimination regime. d) How much (economic) profit does the Cinema-Plex stand to gain by engaging in 3rd degree price discrimination?Hotel Del Luna has 10 rooms with a marginal cost of $20. During the high season, the demand equation is QH = 700- 2PH, where QH is the number of rooms and PH is the room %3D rate per night during the high season. During the low season, the demand equation is Q1, = 420 PL, where QL, is the number of rooms and P, is the room rate per night during the low season. What is the profit-maximizing room rates during the high season (PH)? O PH= $700. %3D O PH = $420. PH = $345. %3D PH = $300. None of the above.Assume you are a single seller of mugs and each buyer’s willingness to pay is below. Assume you incur a cost of $5.00 per unit. (i.e., the marginal cost is constant). How many mugs would you need to sell if you intend to maximise profits, how many mugs would this seller supply to the market, and what price would you charge? Remember, the price has to be the same for each unit sold Buyer Willingness to pay ($) for one mug Bobby 18.00 Jake 16.00 Tara 9.00 Phillip 4.00
- A production process varies only with raw materials, as all other inputs are fixed.The cost of a shipment of 8kg of raw materials is fixed at $85.It takes 5kg of raw materials to create one item of output, Q.The marginal revenue for this process is expressed by the equation: MR = -Q^2 + 52Q− 576.Determine the optimal amount of raw materials to be utilized in this production process.A particular item in the Picasso Paints product line costs $7 each tomanufacture. The fixed costs are $28,000. The demand function isq = -500p + 30,000 where q is the quantity the public will buy at a given price, p. 1) Write the expense function in terms of p.2) How much profit would the firm make if the price was $12?3) What is the revenue equation?A pharmaceutical company is the only producer of a particular drug. It sells that drug in two countries, one rich and the other a development country. The inverse demand for the drug in the rich country is pr(qr) = 20 – 2qñ, and in the developing country it is pp(qp) 10- qp. The total cost of production is C(qR, qp) = (qr+qp)². What is the profit-maximizing quantity in the rich country, qR? (a) qR = 1 (b) qR = 3 (c) qR = 6 (d) qR 8 (e) qR 14