The gains and loss from selling one more unit Sean's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Sean produced seven fire engines, but he has decided to increase production to eight fire engines. The following graph shows the demand curve Sean faces. As you can see, to sell the additional engine, Sean must lower his price from $100,000 to $50,000 per fire engine. Note that although Sean gains revenue from the additional engine he sells, he

Suppose a science museum charges $15 for admission, and each day 200 adults visit the museum. Suppose the museum directors cannot change the price they charge, but they know that for every $1000 a day spent on advertising they can increase demand by 50 tickets. The cost of operating the museum for a day is $2,000. Which of the following advertising choices should they make to maximize profits? O Spend $100O0 a day on advertising O Spend $2000 a day on advertising O Spend no money on advertising O Spend $3000 a day on advertising

You are the manager of a firm that charges customers $16 per unit for the first unit purchased and $12 per unit for each additional unit purchased in excess of one unit. The accompanying graph summarizes your relevant demand and costs. a. What is the economic term for your firm’s pricing strategy? b. Determine the profits you earn from this strategy. c. How much additional profit would you earn if you were able to perfectly price discriminate?

Practice #6   Francine is a a dental floss tycoon living in Montana.  She faces the following demand curve for her product:  Price ( in $/unit)          Quantity demanded  2.50                            1000  2.20                            2000  1.90                            3000  1.60                            4000  1.30                            5000  1.00                            6000   .70                             7000   .40                             8000  Francine has been told by her brother, who is currently taking a marketing class, that if she lowers her price by one increment(for example; changing price from .70 to .40, she will capture market share and increase total revenue.  All of her advisors within the company have assured Francine that her brother's advice may be correct, BUT the above demand curve will not change.  Assume that Francine knows the above demand curve will not change and is also considering her brother's advice.  The prices can only change in…