Airline is a monopolistically competitive market with different name brands such as United Airline, JetBlue, Virgin Airline, etc. A law that restricts the ability of airlines to advertise on billboards in Las Vegas, a resort destination, would likely lead to no change in profits for all airline businesses in Las Vegas. increased price competition among airline business in Las Vegas. reduced efficiency of Las Vegas airline markets. consumers requesting an increase in the number of billboards in Las Vegas.

Website Profit The latest demand equation for your gaming website, www.mudbeast.net, is given by q = -200x + 1000 where q is the number of users who log on per month and x is the log-on fee you charge. Your Internet provider bills you as follows. Site maintenance fee: $30 per month High-volume access fee: $0.40 per log-on Find the monthly cost as a function of the log-on fee x. C(x) = Find the monthly profit as a function of x. P(x) = %3D Determine the log-on fee you should charge (in dollars) to obtain the largest possible monthly profit. x = $ per log-on What is the largest possible monthly profit (in dollars)? $

The pricing model for iTunes has been to price songs individually. In contrast, Spotify opted to offer unlimited song playing for a monthly fee. True or False: Spotify's pricing model will likely yield more profit if the value that individuals attach to songs varies greatly across songs and across different people. True False

Recently, the major firms in the United States cigarette industry joined with the government in a settlement of liability claims. Under the tentative agreement, the industry would curb advertising and pay the equivalent of about $15 billion per year (for smoking-related state Medicaid expenses) in exchange for protection against smoker lawsuits.a) Before the settlement, a leading cigarette manufacturer estimated its marginal cost at $1.00 per pack and its elasticity of demand at -2. What is its optimal price? The firm’s share of the industry payment (based on its historic market share) will raise its average total cost per pack by $.60. What effect will this have on its optimal price?b) A marketing manager suggests that the firm should offer price discounts to the company’s long-term, older, most-loyal (addicted?) customers. Do you agree? Explain carefully.c) In the past, anti-smoking information campaigns have had some limited success in reducing smoking. What price reaction (if any)…