Macmillan Learning Cola DUDDies, L.e., cola encased in cuivie membranes, emmnaung the need for plastic Dotties. The patem once awards patents to ideas it considers useful, novel, and non-obvious-products for which demand would be strong and inelastic. This leads to a large consumer surplus, even when price is high. The office also seeks products that would likely not reach the market in the absence of a guaranteed privileged market position for a period of time-products with a long time-to-market and high R&D costs. The patent office uses the level of fixed costs to apply the latter criterion. The patent office has estimated the demand and total cost curves for these products as follows: • gene predictor: QD = 241 -0.5P; TC = 1002 +20 + 1,000 • ⚫cola bubbles: QD = 184 P; TC = 902 +40 + 450 meat printer: QD = 178-2P; TC = 802 + 40+ 120 a. Calculate the consumer surplus for each product. (Round your answer to two decimal places, if possible.) CS gene predictor=S CS meat printer $ CS cola bubbles= $ b. In light of the consumer surplus associated with each product and the fixed costs involved in creating them, which two products should the patent office grant patents for? meat printer gene predictor cola bubbles
Macmillan Learning Cola DUDDies, L.e., cola encased in cuivie membranes, emmnaung the need for plastic Dotties. The patem once awards patents to ideas it considers useful, novel, and non-obvious-products for which demand would be strong and inelastic. This leads to a large consumer surplus, even when price is high. The office also seeks products that would likely not reach the market in the absence of a guaranteed privileged market position for a period of time-products with a long time-to-market and high R&D costs. The patent office uses the level of fixed costs to apply the latter criterion. The patent office has estimated the demand and total cost curves for these products as follows: • gene predictor: QD = 241 -0.5P; TC = 1002 +20 + 1,000 • ⚫cola bubbles: QD = 184 P; TC = 902 +40 + 450 meat printer: QD = 178-2P; TC = 802 + 40+ 120 a. Calculate the consumer surplus for each product. (Round your answer to two decimal places, if possible.) CS gene predictor=S CS meat printer $ CS cola bubbles= $ b. In light of the consumer surplus associated with each product and the fixed costs involved in creating them, which two products should the patent office grant patents for? meat printer gene predictor cola bubbles
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Macmillan Learning
Cola DUDDies, L.e., cola encased in cuivie membranes, emmnaung the need for plastic Dotties. The patem once awards patents to
ideas it considers useful, novel, and non-obvious-products for which demand would be strong and inelastic. This leads to a
large consumer surplus, even when price is high. The office also seeks products that would likely not reach the market in the
absence of a guaranteed privileged market position for a period of time-products with a long time-to-market and high R&D
costs. The patent office uses the level of fixed costs to apply the latter criterion.
The patent office has estimated the demand and total cost curves for these products as follows:
•
gene predictor: QD = 241 -0.5P; TC = 1002 +20 + 1,000
•
⚫cola bubbles: QD = 184 P; TC = 902 +40 + 450
meat printer: QD = 178-2P; TC = 802 + 40+ 120
a. Calculate the consumer surplus for each product. (Round your answer to two decimal places, if possible.)
CS gene predictor=S
CS meat printer
$
CS cola bubbles= $
b. In light of the consumer surplus associated with each product and the fixed costs involved in creating them, which two
products should the patent office grant patents for?
meat printer
gene predictor
cola bubbles
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