Carl and Simon are two pumpkin growers who are the only sellers of pumpkins at the market. The demand function for pumpkins is Q = 16,400 – 400P, where Q is the total number of pumpkins that each the market and P is the price of pumpkins. Suppose further that each farmer has a constant marginal cost of $1 for each pumpkin produced. Assume that Carl can tell, by looking at Simon's fields, how many pumpkins Simon planted and how many Simon will harvest in the fall. (Suppose that Simon will sell every pumpkin that he produces.) Therefore, Carl sees how many pumpkins Simon is actually going to sell this year. Carl has this nformation before he makes his own decision about how many to plant. f Simon plants enough pumpkins to yield Qs this year, then Carl knows that the profit maximising amount to produce this year is QCarl = O 8,000 – Qs/2. O 16,400 – 400QS. O 16,400 – 800QS- O 4,000 – Qs/2.
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- Carl and Simon are two pumpkin growers who are the only sellers of pumpkins at the market. The demand function for pumpkins is Q = 16,400 - 400P, where Q is the total number of pumpkins that reach the market and P is the price of pumpkins. Suppose further that each farmer has a constant marginal cost of $1 for each pumpkin produced. Assume that Carl can tell, by looking at Simon's fields, how many pumpkins Simon planted and how many Simon will harvest in the fall. (Suppose that Simon will sell every pumpkin that he produces.) Therefore, Carl sees how many pumpkins Simon is actually going to sell this year. Carl has this information before he makes his own decision about how many to plant. If Simon plants enough pumpkins to yield Qs this year, then Carl knows that the profit maximising amount to produce this year is QCarl = Group of answer choices a. 8,000 - Qs/2. b. 16,400 - 400Qs. c. 16,400 - 800Qs. d. 4,000 - Qs/2. e. 12,000 - QsSuppose the graph depicts the marginal cost (MC) curves of two profit maximizing Texas cotton farmers, Jesse and Neal. Assume Jesse and Neal sell their cotton in the same competitive market. If the market price is $4 per bale, how many bales of cotton should each farmer produce? Jesse's optimal output: 800 Neal's optimal output: 400 bales MC Neal = MC Jesse MC Neal MC Jesse Price and cost $10- 9 8 7 160 5 4 3 2 0 MC, Neal MC, Jesse 100 200 300 400 500 600 700 800 900 1000 Bales of cottonExercise 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 QO = 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…
- Carl and Simon are two pumpkin growers who are the only sellers of pumpkins at the market. The demand function for pumpkins is Q = 8,400 - 800P, where Q is the total number of pumpkins that reach the market and P is the price of pumpkins. Suppose further that each farmer has a constant marginal cost of $.50 for each pumpkin produced. If Carl believes that Simon is going to produce Qs pumpkins this year, then the reaction function tells us how many pumpkins Carl should produce in order to maximize his profits. Carl’s reaction function is QCarl = Group of answer choices a. 2,000 - Qs/2. b. 8,400 - 800Qs. c. 8,400 - 1,600Qs. d. 4,000 - Qs/2. e. 6,000 - Qs.An industry has the following cost function: C(X, Y ) = 1500+20X +20Y . Market demands for the 2 goods are given by PX =80−X, and PY =140−2Y Suppose the government wished to use two part tariffs in these markets, and suppose further that two part tariffs are feasible. Imagine that there are 10 consumer in each market. Solve for a set of two part tariffs (one for each martket) that pay the firm zero profits in total, yet achieves efficiency.Suppose that a technological innovation decreases BYOB's costs so that it now faces the marginal cost (MC) and average total cost (ATC) given on the following graph. Specifically, the technological innovation causes a decrease in average fixed costs, thereby lowering the ATC curve and moving the MC curve. Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing the loss. 4.00 3.50 Monopoly Outcome 3.00 2.50 Profit 2.00 Loss 1.50 ATC 1.00 0.50 MC MR 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 QUANTITY (Thousands of cans of beer) PRICE (Dollars per unit)
- In the astrology market there are n astrologers offering the telephone service "I can read your stars", whose demand can be represented by the function Q = 1000 – 2p, where Q is the number of calls and p the price of each call (we assume all calls last the same amount of time and they have a fixed price). Marginal costs per calls of each fortune teller are identical and constant, c = 1. Consumers perceive all astrologers as having the same reliability as they all look at the stars with their own eyes. Thus, consumers will consult the astrologer offering the lowest price. If all astrologers offer their service at the same price they share the market equally. Calculate the price, and the total number of astrologers in the market if the competition among astrologers takes place 'a la Bertrand. (a) p = 0.9; Q = 998. (b) p = 1; Q = 990. (c) p = 1.5; Q = 997. (d) All the other solutions are wrong. Astrologer A have hear of a brilliant astronomer named Galileo who is about to be killed for…There are two types of goat milk consumers in the market: Elves and Hobbits. Elves' inverse demand function is pE(g) = 10 – 8qE , and Hobbits' inverse demand function is pH(p) = 12 – 7qH . Suppose the market has only one goat milk producer, Dolf, whose cost function is C(q) = 4q. Dolf can easily tell the difference between Elves and Hobbits, and he can charge different prices for Elves and Hobbits respectively. What will Dolf's total profits be? Round your answer to 2 decimal points. Answer: 191 The correct answer is: 3.41Two farmers produce milk for local town with local milk demand given by Q=100-1/3P (P denotes price measured in Rands, Q denotes the quantity measured in litres). Both farmers have the same cost function given by TC=150+2q (where q denotes output)a. What output should farmer 1 produce if he or she expects their rival to produce 20 units?
- Suppose that a technological innovation decreases BYOB's costs so that it now faces the marginal cost (MC) and average cost (AC) given on the following graph. Specifically, the technological innovation causes a decrease in average fixed costs, thereby lowering the AC curve and moving the MC curve. Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing the loss. PRICE (Dollars per unit) 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0 0 MC 0.5 MR AC 1.0 1.5 2.0 2.5 3.0 QUANTITY (Thousands of cans of beer) 3.5 D 4.0 Monopoly Outcome Profit Loss ?A-Z Suppose that a technological innovation decreases BYOB's costs so that it now faces the marginal cost (MC) and average total cost (ATC) given on the following graph. Specifically, the technological innovation causes a decrease in average fixed costs, thereby lowering the ATC curve and moving the MC curve. Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing the loss. bongo 4.00 3.50 Monopoly Outcome 3.00 2.50 Profit A 2.00 Loss 1.50 АТС 1.00 0.50 MC MR 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 QUANTITY (Thousands of cans of beer) PRICE (Dollars per unit)Suppose that managers at Honda are deciding how to price the new Honda Accord. The managers estimate that their total costs increase by $20,000 for each car they produce. They also estimate the demand curve they face; it is described by the equation: Q = -0.4 P + 16,000, where Q represents the quantity of Honda Accords they will sell and P represents the price they charge in US dollars. We can re-write that demand curve as: P = 40,000 - 2.5 Q. Take every possibly quantity that the managers might choose between and 7,000 in units of 100. For each possible quantity, calculate the associated price the managers would need to charge, the revenue they would earn, and the total costs. You can then calculate profits for each level of quantity. Highlight the cell that contains the highest value of profit. Finally, you can also approximate marginal revenue here as the change in total revenue after the next 100 cars are produced. At what quantity does marginal revenue roughly equal marginal cost?…