ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- What is the inverse demand function for other town residents?
- At a price of $300,. will college students buy any firewood? What about town residents? At what price is the quantity demanded by other town residents zero?
- Draw the total demand curve, which sums the demand curves for college students and other residents?
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- The director of a recreation center in a small college town is considering changing the way he prices access cards. He has hired an economic consulting firm to estimate the demand for access cards. The firm has classified people who go the recreation center into two groups, and has come up with two demand functions. The demand curves for the general public (Q) and students (Q,) are given below: Q = 700 – 4P Q, = 1,300 – 5P a. If the current price of access cards is $100, identify the quantity demanded by each group. b. Find the price elasticity of demand for each group at the current price and quantity. c. Is the director maximizing the revenue he collects from card sales by charging $100 for each card? Explain. d. What price should he charge each group if he wants to maximize revenue collected from card sales? Check whether the new total revenue is indeed greater than the old one.arrow_forwardQuestion #2 Consider the following demand function for frozen dinners where QD is the quantity of frozen dinners demanded per week, P is the price per frozen dinner, PF is the price per fast food meal, Y is the average yearly consumer income, and A is the number of advertisements for frozen dinners. Demand Function for Frozen Dinners: QD = 1,000 – 10P + 20PF – 0.01Y + A Suppose that a frozen dinner sells for $4, a fast food meal sells for $6, average yearly consumer income is $50,000, and that there are 20 advertisements for frozen dinners. Calculate and interpret the income elasticity of demand. Calculate and interpret the cross-price elasticity of demand with respect to fast food meals.arrow_forwardAssume that the demand curve D(p) given below is the market demand for widgets: Q = D(p) = 1183-12p, p > 0 Let the market supply of widgets be given by: Q = S(p) = -5 + 10p, p > 0 where p is the price and Q is the quantity. The functions D(p) and S(p) give the number of widgets demanded and supplied at a given price. What is the equilibrium price? Please round your answer to the nearest hundredth. What is the equilibrium quantity? Please round your answer to the nearest integer. What is the total revenue at equilibrium? Please round your answer to the nearest integerarrow_forward
- Find the price-demand equation for tickets to a particular zoo when the demand is 225 tickets per day at $15.00 per ticket, given that the marginal price-demand function, p′(x), for x number of tickets per day, is given as p′(x)=−0.015e−0.01x. If the zoo only sells 150 tickets per day, what should the price be? Do not round until the end. Round your answer to the nearest hundredth and do not include a dollar sign in your answer.arrow_forwardSuppose the demand function for smart phones is given by Q(P) = AP¹-a 1-a where A> 0 and a > 1. Use calculus to show that the price elasticity is equal to 1 — a everywhere along the whole curve. (Hint: Recall that if f(x) = x³, then ƒ'(x) = ßxß-¹). Interpret this result.arrow_forwardThe quantity of a product demanded by consumers is a function of its price. The quantity of one product demanded may also depend on the price of other products. For example, if the only chocolate shop in town (a monopoly) sells milk and dark chocolates, the price it sets for each affects the demand of the other. The quantities demanded, q, and q2, of two products depend on their prices, p, and P2, k as follows: Enter the exact answers. If one manufacturer sells both products, how should the prices be set to generate the maximum possible revenue? What is that maximum possible revenue? P₁ = P2 = H. 9₁ = 9₂ = The maximum revenue is i 280 - 5p₁-3p2 360 - 3p₁ - 5p2.arrow_forward
- Q3. Assume that the demand curve D(p) given below is the market demand for widgets:Q=D(p)=2372−19p, p > 0 Let the market supply of widgets be given by:Q=S(p)=−3+6p, p > 0 where p is the price and Q is the quantity. The functions D(p) and S(p) give the number of widgets demanded and supplied at a given price.What is the equilibrium price? Please round your answer to the nearest hundredth.What is the equilibrium quantity? Please round your answer to the nearest integer.What is the price elasticity of demand (include negative sign if negative)? Please round your answer to the nearest hundredth.What is the price elasticity of supply? Please round your answer to the nearest hundredtharrow_forwardLooking for help on how you would go about solving the following problem: The following functions represent the demand and supply for hair cuts. QD=300-6P QS=2P-20 what demand function would accurately represent an increase in demand for hair cuts? QS=450-6P QD =150-6P QD =450-5P QD =450-6Parrow_forwardThe manager of a bicycle shop has found that, at a price (in Rands) of p(x) = 150 –x/4 per bicycle, x bicycles will be sold . Answer the following:• Find an expression for the total revenue from the sale of x bicycles. (Hint: Revenue = Demand *Price. )• Find the expression for the quantity to be sold q if the demand function demand is given byp = -10q + 3200• What is the number of bicycles x, sold if the price is R40arrow_forward
- one demand function is linear and the other is called a constant elasticity demand function. Using data tables, show that the price elasticity in the linear demand function is not constant in price, and show that the price elasticity is constant in the constant elasticity demand function.arrow_forwardWrite the inverse demand function for good X when Pc = 434 Pd730 m = 34000 a = 2490 This will be a function of Q P(Q) = ?arrow_forwardSuppose the demand function for avocados is Q=104-40p + 20p₁ +0.01Y, where p is the price of avocados, p, is the price of tomatoes, and Y is average income, and the supply function for avocados is where p, is the price of fertilizer. Suppose p = $0.80, Y = $4,000, and p = $0.40. What is the equilibrium price and quantity of avocados? The equilibrium price of avocados is and the equilibrium quantity is Q=58+15p -20pf, and the equilibrium quantity is p=$2 Q = 80 units. (Enter your responses rounded to two decimal places.) Suppose the government charges a $2.20 specific tax per avocado to be paid by consumers. With the tax, the equilibrium price of avocados is p=$ Q= units.arrow_forward
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