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- If you are selling Mercedes-Benz cars in your showroom, what product "substitutes" are available to your prospective customers?The demand and supply functions for Penn State ice hockey jerseys are: p=d(x)=x²-15x + 545 p=s(x) = 5x² + 3x + 17 where x is the number of hundreds of jerseys and p is the price in dollars. (a) Find the equilibrium quantity, Equilibrium quantity, x- (b) Compute the total surplus at the equilibrium point. Total surplus = which corresponds to dollars jerseys.Lecture: Travel Cost 9. Golden Shore is a popular beach in Chicago located on Lake Michigan downstream of All- Leather's factory. Under the circumstances described in part (0) of the above question, the demand function to go to the beach at Golden Shore is given by x = 40 – 2p, where x is trips per household per month, and p is the cost of a round-trip visit to Golden Shores. The people who visit Golden Shores come from Hyde Park, South Shore and South Chicago. The round-trip cost to Golden Shore from Hyde Park is $5, from South Shore it is $10, and from South Chicago it is $14. 5,000 households live in Hyde Park, 3,000 live in South Shore, and 8,000 live in South Chicago. a) How much consumer's surplus is obtained per month through beach recreation at Golden Shore? b) Suppose the correct Pigouvian tax is imposed on leather production by All-Leather and the situation switches to the conditions described in part (g) of the above question. As a result, water quality improves at Golden…
- Demand for Corn Flakes is: P = 14 - Q. Supply of Kellogg's Corn Flakes is: P = 2 + Q. Now a generic company enters the market, selling generic Corn Flakes for $4. Assume consumers are indifferent between generic and Kellogg's Corn Flakes. When the generic corn flakes enter the market, Kellogg's will sell how many less boxes of their own cereal?(2) In a fictitious town of Fruitlandia, 4 individuals each buy apricots following their individualdemands P = 6 – Q and 1 individual buys following individual demand P = 11 – Q, where Pdenotes the price and Q denotes the quantity. For the price range between $0 to $6, the town’saggregate demand is given by(a) P = 35 – 5Q(b) P = 17 – 2Q(c) P = (17/2) – (Q/2)(d) P = 7 – (Q/5)(e) None of the aboveHow can the owner of The Burger Barn determine if a one-day promotional sale on milkshakes will affect the total revenues generated by hamburger sales ?
- Consider a regional with a uniform distribution of population where every household consumes the same amount of a good. The regional government recently stated its policy for the location of factories making the good: “A factory should reach the minimum point of its average production cost curve at an output of 1000 units. Since the total demand for the good is 4000 units, we should have 4 factories in the region. Since the distribution of the population is uniform, the factories should be distributed uniformly throughout the region” Comment on this policy as to in particular whether there should be more or fewer factories for efficiency?Discuss competitive pricing model in a market economySpreadsheet exercises. Suppose that the market for video games is competitive with demand function Qd = 130 − 4p + 2Y + 3pm − 2pc, where Qd is the quantity demanded, p is the market price, Y is the monthly budget that anaverage consumer has available for entertainment, pm is the average price of a movie, and pc is the price of a controller that is required to play these games. Given that Y = $100, pm = $30, and pc = $30, use Excel to calculate quantity demanded for p = $10 to p = $80 in $5 increments. Use Excel’s charting tool to draw the demand curve. Let Y = $100, pm = $30, and pc increase to $40. Recalculate the demand schedule in part 1 and use Excel to draw the new demand curve.
- Suppose Verizon has only three cell phone customers. The demand curve for each customer’s monthly demand (in hours) is shown here: Here p = price in dollars charged for each hour of cell phone usage. It costs Verizon 25 cents to provide each hour of cell phone usage. a. If Verizon charges the same price for each hour of cell phone usage, what price should they charge? b. Find the profit maximizing a two-part tariff for Verizon. How much does the best two-part tariff increase the profit over the profit maximizing the single price?Ilsia is driving home from work. She needs to buy gas and notices an Exxon-Mobil station on one side of the street and a Shell station on the other side of the street. Although run by different companies, the two stations sell gasoline at the same price. a. The most likely reason that the price is the same is that drivers need gas and are willing to pay whatever price a gas station charges. consumers view gasoline from different gas stations as perfect substitutes. government regulation requires both gas stations to charge the same price. gas stations always make a profit, so they can charge any price they want. b. If one station increases its price, it will make a higher profit. it will lose customers to the cheaper station across the street. it will be fined by the government. it will sell more gasoline.4b. The Parking Services Department on a small college campus has control of 1000 Student parking spaces. The annual demand for these spaces, as a function of the Price, p, for a parking permit, is QD = 2000 - 20p. i. If Parking Services wants to set a Pareto-efficient price but believes a parking space is a rival good, what price will it set? ii. Following a survey, Parking Services determines that a parking space is a non- rival good with the number of times it is shared, a, a function of the price, a = 20 -1/2p. With this information, what is the profit-maximizing price of a permit, and how many students will share a parking space?