EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Chapter 12, Problem 10SP
To determine
Reason for paying high price by the retailers.
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Economics
You are a manager of a monopolistically competitive firm that is currently charging a price of $5 for its product and, at this price you are selling 52,000 units of your product. At this price and quantity combination, you have estimated your own price elasticity of demand to be -2.0 and you have an advertising elasticity of 0.25. What is the optimal amount for you to spend on advertising?
What do you think? Which style do you
prefer- B2B or B2C marketing? What
differences do you think are most significant?
Enter your thoughts telling my why you prefer
one over the other.
What are the factors affecting pricing in Hospitality Industry?
Chapter 12 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
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- How does merchandise flow through a typical marketingchannel?arrow_forwardThe graph presents the short-run costs and revenue for a Cost and revenue monopolistically competitive firm. Use this information to determine the profit-maximizing output and profit for this firm $800 Marginal cost Average total cost 750 in the short run. 700 650 600 What is the profit-maximizing output of this monopolistically 550 competitive firm? Round your answer to the nearest 500 whole number. 450 400 Demand 350 300 units of output 250 200 150 What is the maximum level of profits for this monopolistically 100 Marginal revenue competitive firm? Round your answer to the nearest 50 whole number. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Units of output %24arrow_forwardHow much should I charge in order to maximize the revenue of this sale?arrow_forward
- In which type of market, monopolistic or competitive market, is the equilibrium market price lower? Why?arrow_forwardFRONT PAGE Pricing Disney+ Disney decided it wanted to provide streaming services directly to customers, rather than renting its library of films and television shows to other streaming services like Netflix. But how successful would a streaming service be? In other words, what did the demand for a "Disney+" streaming service look like? Disney knew that the number of subscribers would depend not just on the attractiveness of the Disney archives, but also on the subscription price. After doing some market research, Disney decided to launch Disney+ at a price of $6.99 a month (or $69.99 per year). When Disney+ was launched on November 12, 2019, 10 million people signed up on the first day-a resounding success! Source: News reports, October-December 2019. Suppose Disney+ changes its monthly subscription price from $7 to $9 per month. Graphically show the impact of this price change in the following markets: a. Popcorn, pizza, and other movie snacksarrow_forwardThe diagram above shows a monopolistically competitive firm in the long run. Answer the questions below. Using the points displayed on the diagram, name the rectangular area that represents the profit or loss. What should the firm do regarding price and/or quantity to minimize its losses?arrow_forward
- How does monopolistic competition effect the pharmaceutical industry?arrow_forwardThe following graph shows the daily demand curve for bippitybops in Detroit. 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. PRICE (Dollars per bippitybop) OTAL REVENUE (Dollars) 2400 1600 100 90 1200 80 1000 70 800 60 50 40 30 20 2200 + 10 2000 + 1800 + 0 1400 + Calculate the daily total revenue when the market price is $90, $80, $70, $60, $50, $40, $30, and $20 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. (?) 0 ** B Demand 80 10 20 30 40 50 60 70 QUANTITY (Bippitybops per day) 90 100 Total Revenue A ? Total Revenuearrow_forwardWestchesser Gloves is a monopolistically competitive firm that sells leather gloves. Use the graph to highlight the area of profit or loss and answer the questions, Price per pair (5) 10 20 Marginal profit or loss: $ Aver co Pairs of gloves (in thousand) Demand 70 80 90 100 Profit or loss Calculate Westchesser's profit or loss at the profit-maximizing price. What will happen to the number of firms in this industry in the long run? Firms will enter this industry, increasing the price at which each firm can sell their gloves until firms begin to earn normal profits. O Firms will exit this industry, increasing the price at which each firm can sell their gloves until firms begin to carn normal profits. O Firms will exit this industry, decreasing the price at which each firm can sell their gloves until firms begin to carn normal profits. O Firms will enter this industry, decreasing the price at which each firm can sell their gloves until firma begin to carn normal profitsarrow_forward
- Answer all four questions! Is a monopolistically competitive firm productively efficient? How can you tell? Offer one reason why a monopolistically competitive firm might be productively inefficient. Is it allocatively efficient? How can you tell? Offer one reason why a monopolistically competitive firm might be allocatively inefficient.arrow_forwardThe link to answer: https://www.thefashionlaw.com/from-intangibility-to-price-setting-power-what-is-a-brand/ Why did the author claim that the price elasticity of demand is negligible? Do you agree or not? Explainarrow_forwardCost and revenue The graph presents the short-run costs and revenue for a monopolistically competitive firm. Use this information to $800 Marginal cost Average total cost determine the profit-maximizing output and profit for this 750 firm in the short run 700 650 What is the profit-maximizing output of this 600 550 monopolistically competitive firm? Round your answer to 500 the nearest whole number 450 400 Demand 350 units of output 300 250 What is the maximum level of profits for this 200 monopolistically competitive firm? Round your answer to 150 the nearest whole number Marginal revenue 100 50 0 1 2 3 4 5 6 7 8 9 1011 12 13 14 1516 17 18 19 20 Units of output Aarrow_forward
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