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?   multiple choice Third degree price discrimination Fourth degree price discrimination First degree price discrimination Second degree price discrimination 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? Instructions: In solving this problem, assume the firm cannot sell fractions of a unit.

The Taco Bus Low Price High Price The Fajita Wagon Low Price Taco Bus: $1,000 Taco Bus: $500 Fajita Wagon: $1,000 Fajita Wagon: $6,000 High Price Taco Bus: $6,000 Taco Bus: $4,000 Fajita Wagon: $500 Fajita Wagon: $4,000 Refer to the table above, which describes the payoffs to different pricing strategies for a duopoly. What set of strategies would be the Nash equilibrium for this game? The Fajita Wagon adopts a high price, and the Taco Bus adopts a high price. The Fajita Wagon earns $1,000 profit, and the Taco Bus earns $1,000 profit. The Fajita Wagon earns $4,000 profit, and the Taco Bus earns $4,000 profit. The Fajita Wagon adopts a low price, and the Taco Bus adopts a low price. There is no Nash equilibrium in this game.

Omari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Omari initially produced four trucks, but then decided to increase production to five trucks. The following graph gives the demand curve faced by Omari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Omari must lower the price from $105,000 to $90,000 per truck. Notice that Omari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial four engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial four engines by selling at $90,000 rather than $105,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $90,000. PRICE (Thousands of dollars per fire engine) 165 150 135 120 105 Omari 90 75 60 45 30 15 Revenue Lost Demand…

The following graph shows the daily demand curve for bippitybops in Chicago. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. Total Revenue 0 8 16 24 32 40 48 56 64 72 80 200 180 160 140 120 100 80 60 40 20 0 PRICE (Dollars per bippitybop) QUANTITY (Bippitybops per day) Demand A B Area: 1280 Calculate the daily total revenue when the market price is $180, $160, $140, $120, $100, $80, $60, and $40 per bippitybop. Then, use the green point (triangle symbol) to plot the daily total revenue against quantity corresponding to these market prices on the following graph. Total Revenue 0 8 16 24 32 40 48 56 64 72 80 3840 3520 3200 2880 2560 2240 1920 1600 1280 960 640 320 0 TOTAL REVENUE (Dollars) QUANTITY (Bippitybops per day) According to the midpoints formula, the price elasticity of demand between points A and B on the initial graph is approximately . Suppose the…

I pretty sure I got the first part right. I am struggling with bottom parts.

Could companies implementing two pricing strategies at the same time? For instance, cost based pricing and competition based pricing

Define price discrimination. Give two examples of price discrimination. How does perfect price discrimination affect consumer surplus, producer surplus and total surplus?

Macmillan Learning You have been appointed head of marketing for Barry's Younique Yachts. Barry, the CEO, is interested in determining whether offering his yachts at a lower price would increase the firm's revenue. He asks you for advice. Using your knowledge of elasticity, you should tell Barry that he should increase his prices. Demand for yachts is perfectly inelastic, so a price increase will cause total revenue to increase. that he should reduce his prices. Yachts are luxury goods and therefore exhibit a high price elasticity of demand. Thus, reducing prices would increase revenue. that he should increase his prices. Demand for yachts is likely to be elastic because they are so much fun to drive. Thus, increasing prices would increase revenue. that he should reduce his prices. Yachts are a necessity and therefore have a low price elasticity of demand. Thus, reducing prices would increase revenue.

You are the manager of a monopolistically competitive firm, and your demand and cost functions are given by Q = 36 – 4P and C(Q) = 124 + 16Q + Q2.a. Find the inverse demand function for your firm’s product b. Determine the profit-maximizing level of production and price. Quantity: ? Price: ? c. Calculate your firm's maximum profits. d. I expect profit to (blank), price to (blank), and quantity to (blank).

You are the manager of a monopolistically competitive firm, and your demand and cost functions are estimated as Q = 48 − 2P and C(Q) = 6 + 3Q + Q2. a. Find the inverse demand function for your firm’s product.   P = − Q   b. Determine the profit-maximizing price and level of production. Instructions: Round your response to the nearest penny (two decimal places).   Price: $   Instructions: Round your response to one decimal place.   Quantity:   c. Calculate your firm’s maximum profits.   Instructions: Round your response to the nearest penny (two decimal places).  $   d. What long-run adjustments should you expect? Explain.     multiple choice Entry will occur until profits are zero. Exit will occur until profits rise sufficiently high. Neither entry nor exit will occur.