Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 12, Problem 4P
To determine
Price and quantity effect of a fall in price, area of the rectangles on graph and effect on total revenue.
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Students have asked these similar questions
In advertising, a business is not only making consumers aware of the existence of the product and its positive features but is purposely trying to persuade consumers to purchase the product. As a piece of economics which of the following best characterises what advertisers are trying to do?
(a) Shift the demand curve to the right and make it more income elastic;
(b) Shift the demand curve to the right and make it less income elastic;
(c) Shift the demand curve to the right and make it less price elastic;
(d) Shift the demand curve to the right and make it more price elastic.
Jonny and Chen Brad Baxter have just made a documentary movie about their basketball team. They are
thinking about making the movie available for download on the Internet, and they can act as a single-
price monopolist if they choose to. Each time the movie is downloaded ,their Internet service provider
charges them a fee of $4. They are now arguing about which price to charge customers per download.
The accompanying table shows the demand schedule for their film.
Price per download
Quantity of download
demanded
$10
8
1
3
4
10
15
a. Calculate the total revenue and the marginal revenue per download.
b. They are proud of the film and wants as many people as possible to download it.
Which price would they choose? How many downloads would be sold?
c. They want as much total revenue as possible. Which price would he choose? How
many downloads would be sold?
Suppose that a new restaurant entry increased consumer elasticity of demand for the sushi appetizer from 2 to 3. The price you charge initially is $10. By how much will you have to adjust the price? Will you still be able to make profit?
Chapter 12 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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