2. GMG, a cinema complex, isconsidering charging a different price forthe afternoon showings of its filmscompared with the evening ticket pricefor the same films. It has estimated itsafternoon and evening demand mfunctions to be:PA8.5 -0.25QAPE12.5-0.4QEWhere PA and PE are ticket prices (in)and QA and QE are number of customersper week (in hundreds). GMG hasestimated that its fixed costs are 2,000per week, and that its variable costs are50 pence per customer.REQUIRED:Calculate the price that GMG shouldcharge if it does not use pricediscrimination, assuming its objective isto maximize profit.11. Calculate the prices that GMGshould charge if it does use pricediscrimination.122. Calculate the price elasticities ofdemand in the case of pricediscrimination.iv. How much difference does pricediscrimination make to profit?

i. Calculate the price that GMG should charge if it does not use price discrimination, assuming its…

Answered: 2. GMG, a cinema complex, is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5.19 explain.
Gr8 Ideaz Inc. has determined that the demand function for their heated socks is given by: 5 7P². a. Find E(p), the Elasticity of Demand as a function of price, p. E(p) = b. Find the Elasticity of Demand when heated socks are selling at a price of $10. Give result accurate to at least 3 decimal places. E(10) = c. At this price ($10): We would say the demand for heated socks is: Select an answer Based on this, in order to increase revenue we should: Select an answer d. Use the Elasticity model to determine the price that maximizes revenue. (Round result to 2 decimal places.) D(p) = = 345- p=
Q1
Price 180 150 120- 90- 60- 30 04 5 10 Quantity 15 20 The figure above shows the demand curve. Which if the following represents the inverse demand equation? OQD = -12 P + 15 OP=-0.083 QD + 180 P= -12 QD + 180 QD = -0.083 P + 15 P= -12 QD + 15 QD = -12 P + 15 P=0.083 QD + 15 QD = -0.083 P + 180
You own a bakery and shop that makes and sells gourmet doggie treats. You have done market research and you know with certainty that your product is a normal good, not an inferior good. The current demand function for your gourmet doggie treats is: QD = 480 -6*P which of course means the equation for your current demand curve is: P = 80 -(1/6)*Q You are opening a new shop in a new part of town, and you know that incomes in that part of town are much lower than incomes are where your shop is now. Which of the following is most likely the demand curve in your new shop? Multiple Choice O P=68- (1/6)*Q P = 102 - (1/6)*Q P=92-(1/6)*Q P = 88 - (1/6)*Q
A1). The price, p, that a bookstore charges for a special gift edition of a popular trilogy is related to the demand, q, by the equation 100pq + q? = 5,000,000. Suppose the price is currently set at $40. (a). At what rate is the demand currently changing with respect to this price? (Include units) (b). At what rate is the revenue currently changing with respect to this price? (Hint: use the chain rule). (Include units). (c). Suppose the demand is currently increasing at a rate of 50 copies per month. How fast is the price currently changing per month? (again, assume the price is currently $40).Include units.
1. The demand function for a certain brand of CD is given by p = -0.01x² - 0.2x + 10 where p is the unit price in dollars and x is the quantity demanded each week, measured in units of a thousand. The supply function is given by p = 0.01x² + 0.2x + 4 where p is the unit price in dollars and x stands for the quantity that will be made available in the market by the supplier, measured in units of a thousand. Determine the producers' surplus if the market price is set at the equilibrium price. (Round your answer to the nearest dollar.)
2. [Own Price Elasticity of Demand] Given a demand function Q=f(P), the own price elasticity of demand is defined as P - (de). (2). ε = What is the own price elasticity of demand e (a) for the linear demand function Q = 200-3.5P when P = 10. (b) for the linear inverse demand function P= 100-3.5Q when Q = 10. (c) for the inverse demand function P=Q-35, when (i) Q = 5; (ii) Q = 10.
You have been asked to analyze what will happen to the New England market for electricity if the Winter 2022-23 (December 2022 through February 2023) results in much colder temperatures than Winter 2021-22 (December 2021 through February 2022), causing all residential customers to scramble for more electricity than they would typically need to heat their homes. Using your graph from Question 2, analyze the impact of this change in consumer desire for more electricity. Clearly show any shifts in demand and/or supply curve(s) that came about because of this exit. Label any shifted curves as D2 and/or S2. Clearly show the new market equilibrium. Label the new equilibrium price as P2 and equilibrium quantity transacted as Q2
DINKs are households with "double income, no kids", and such households are invading your neighbourhood. You decide to take advantage of this influx by starting a gourmet take-away food store. Assume that these DINKs in your neighbourhood are your only potential customers.You know that the price elasticity of demand for your food from DINKs is 0.5, and their income elasticity of demand is 1.5.From the standpoint of the quantity that you sell, explain which of the following changes would concern you most.First, the number of DINKs in your neighbourhood falls by 10 percent.Second, the average income of DINKs falls by 5 percent.
6:357 A webassign.net In this problem, p is in dollars and q is the number of units. (a) Find the elasticity of the demand function p + 2p + q = 100 at p = 9. (b) How will a price increase affect total revenue? O Since the demand is unitary, there will be no change in the revenue with a price increase. O Since the demand is inelastic, an increase in price will decrease the total revenue. O Since the demand is elastic, an increase in price will decrease the total revenue. Since the demand is inelastic, an increase in price will increase the total revenue. Since the demand is elastic, an increase in price will increase the total revenue. Need Help? Read it

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