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- Refer to the figure below. When the firm charges the reservation price to each consumer, the additional profit equals area A C D Select one: a. A + D b. B+A C. C + B d. B+C+D . MR MC D-AR QuantityPRICE (Dollars per cupcake) 4.00 3.50 1.00 2.50 2.00 1.50 1.00 0.50 0 MC D ATC MR Demand 0.5 1.0 1.5 20 25 30 35 40 QUANTITY (Thousands of cupcakes) At the profit-maximizing output and price, the shop's profit is equal to Given the profit-maximizing choice of output and price, there are Profit Maximizing Outcome Profit Loss 2 (Hint: Be sure to enter a minus sign if profit is negative.) shops in the industry than there would be in long-run equilibrium.A publisher faces the following demand schedule for the next novel from one of its popular authors:Price Quantity Demanded100 090 100,00080 200,00070 300,00060 400,00050 500,00040 600,000 530 700,00020 800,00010 900,0000 1,000,000The author is paid $2 million to write the book, and the marginal cost of publishing the book is a constant $30 per book.d. In your graph, shade in the deadweight loss. Explain in words what this means. e. If the author was paid $3 million instead of $2 million to write the book, how would this affectthe publisher’s decision regarding the price to charge? Explain. f. Suppose the publisher was not profit-maximizing but was concerned with maximizing economicefficiency. What price would it charge for the book? How much profit would it make at thisprice? (
- If you want to increase demand for your restaurantbut are unable to lower prices or increase advertising,what steps might you take?As you review the Facebook site, you note that packagingfor your company’s bread uses the words “heart-healthy.”Would you bring this to the attention of the marketing groupresponsible for product packaging? Or would you look fora way to obscure the package design online? Defend youranswer.a. b. If a firm's the price elasticity of demand (Eg) to be-3.5 and marginal cost (MC) is $15. Using the mark-up rule, what is the optimal price for the firm to charge? If the price elasticity of demand (En) changes to -3.0, and MC is still $15. Use the mark-up rule to find the new optimal price for the firm to charge? What is the defining feature of a Pure Selling Problem and what impact does it have one the firm's goal to maximize profit?
- MIcro: The company “Mike Broonie” operates in the market of monopolistic competition. Just now, the company weekly produces and sells 100 units of pillows for £12 each. The average total cost to produce the pillows doesn’t depend on the output, being £10 per unit. Having evaluated the price elasticity of demand for its product, the company concluded that demand is inelastic at the moment. a. What indicator characterizes the price elasticity of demand? What formula (or formulas) one can use to calculate this indicator? Choose any number for this indicator that, under the conditions specified in the case, could characterize the price elasticity of demand for the company “Mike Broonie”. b. Imagine that the owner of the company wants to increase the price of the company’s product. How will it affect sales, revenue, and profit (will each of these indicators increase, decrease, or remain the same)? Give here theoretically substantiated forecast. To increase the number of points…The folowing diagram shows the curves for perceived demand, marginal revenue, and cost for Manuela's Pizza, which serves Mexican-style pizza. Manuela's is one of many other fast food restaurants in this town. MC Price and Cost ATC Demand Quantity of piezas Which statement describes the transibon to the long nun? Select the best answer. O More fast food restaurants will enter the market, and Manuela's demand curve will become more elastic. Manuela's will raise its prices since there is a large demand for its pizzas. O More fast food restaurants will enter the market, and Manuela's demand curve will become more inelastic. Manuela's will experience lower costs of production because it will expand its output.In which type of market, monopolistic or competitive market, is the equilibrium market price lower? Why?
- A product market has only one seller.. There are no close substitutes for the product. What type of market is this and how does it set prices? Select one: a. It is an example of monopolistic competition where firms charge the same price. b. It is an example of perfect competition with market power. c. It is an example of a monopoly which set prices based on market demand. d. There is no way to tell where prices come from without knowing what the product is. e. It is a monopolistically competitive firm that can charge whatever it wants to charge.6. Guy Rope and his backing group, the Tent Pegs, have just finished recording their latest music CD. Their record company's marketing department determines that the demand for the CD is as follows: Price (€) Number of CDs €24 10 000 22 20 000 20 30 000 18 40 000 16 50 000 14 60 000 The company can produce the CD with no fixed cost and a variable cost of €0.15 per CD. a. Find total revenue for quantity equal to 10 000, 20 000 and so on. What is the marginal revenue for each 10 000 increase in the quantity sold? b. What quantity of CDs would maximize profit? What would the price be? What would the profit be? c. If you were Guy Rope's agent, what recording fee would you advise Guy to demand from the record company? Why?Charging a price to different groups depending on their different demand elasticities is described as ... Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b C Write your response here... d e Question 9 1st Deg Price Discrimination 2nd Deg Price Discrimination 3rd Deg Price Discrimination 2-part pricing Bundling