Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 15, Problem 11PA
To determine
The diagrammatic representation of demand and cost curves .
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A movie theater is showing two different movies: a Hollywood blockbuster (with 100 customers willing to pay $10 for a ticket, and 100 willing to pay $8) and an independent film that attracts 50 film buffs, willing to pay $20 each. Marginal cost is zero and neither movie can fill theater capacity. What is the theater's maxim profit if it cannot price discriminate (it must charge the same price for both movies) and if it can price discriminate (it may charge different prices for different movies)?
Q.6. Larry, Curly, and Moe run the only saloon in town. Larry wants to sell as many drinks
as possible without losing money. Curly wants the saloon to bring in as much revenue as
possible. Moe wants to make the largest possible profits. Using a single diagram of the
saloon's demand curve and its cost curves, show the price and quantity combinations
favored by each of the three partners. Explain.
The table shows the town of Driveaway's demand schedule for gasoline. Assume the town's gasoline seller(s) incurs a cost of $2 for each gallon sold, with no fixed cost.
Quantity
Price
Total Revenue
(Gallons)
(Dollars per gallon)
(Dollars)
8
50
7
350
100
600
150
750
200
4
800
250
3
750
If there are exactly five sellers of gasoline in Driveaway and if they collude, then which of the following outcomes would be most profitable for the sellers?
Each seller will sell 30 gallons and charge a price of $5.
Each seller will sell 50 gallons and charge a price of $3.
Each seller will sell 30 gallons and charge a price of $4.
Each seller will sell 40 gallons and charge a price of $4.
O O
Chapter 15 Solutions
Principles of Microeconomics (MindTap Course List)
Ch. 15.1 - Prob. 1QQCh. 15.2 - Prob. 2QQCh. 15.3 - Prob. 3QQCh. 15.4 - Prob. 4QQCh. 15.5 - Prob. 5QQCh. 15 - Prob. 1CQQCh. 15 - Prob. 2CQQCh. 15 - Prob. 3CQQCh. 15 - Prob. 4CQQCh. 15 - Prob. 5CQQ
Ch. 15 - Prob. 6CQQCh. 15 - Prob. 1QRCh. 15 - Prob. 2QRCh. 15 - Prob. 3QRCh. 15 - Prob. 4QRCh. 15 - Prob. 5QRCh. 15 - Prob. 6QRCh. 15 - Prob. 7QRCh. 15 - Prob. 8QRCh. 15 - Prob. 1PACh. 15 - Prob. 2PACh. 15 - Prob. 3PACh. 15 - Prob. 4PACh. 15 - Prob. 5PACh. 15 - Prob. 6PACh. 15 - Prob. 7PACh. 15 - Prob. 8PACh. 15 - Prob. 9PACh. 15 - Prob. 10PACh. 15 - Prob. 11PACh. 15 - Prob. 12PA
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- If you have a graph showing a monopolistic competitive situation in which demand shifts to the left in the long run but your graph only shows the MR curve in the short run, how do you figure out where the long-run MR line should go on the graph? (I have 2 demand curves (sr and lr), but only 1 MR curve (sr). I think it would be to the left of MR sr, but don't know how to draw it. One would need to know this to figure out excess capacity and markup, right?arrow_forwardThe figure below illustrates the market for steel. If the steel market is competitive, firms can produce steel at a constant marginal cost of $100 per ton. Therefore, the price of steel is $100 per ton, and 100 tons are produced. Assume that if all the steel companies consolidate into a monopoly, the monopoly marginal cost will fall to $70 per ton. Use the straight line tool to draw the monopoly marginal revenue and marginal cost lines (extend the marginal cost line to 300 tons). Then use the plot point tool to plot the monopoly profit maximizing price and output on the demand curve. Part 2. If the market is competitive, total surplus is $ _________ Part 3. If the market is controlled by a monopoly, total surplus is $________arrow_forwardGiven the information in the table, if a movie theater does not price discriminate, then it charges either the highest price the college students are willing to pay or the one that the senior citizens are willing to pay. The theater would practice price discrimination by charging college students $16 and senior citizens $8. Assume the firm incurs no fixed costs and the marginal cost of production is zero. How does total surplus change if the movie theater goes from charging a single price to perfectly price discriminating? Profit from 15 College Profit from 10 Senior Total Students $120 $240 $240 Citizens Profit $200 Uniform, $8 Uniform, $16 Price Discrimination $80 $80 $320 The change in total surplus from practicing perfect price discrimination instead of charging a single price is s (Enter your response rounded to the nearest whole number)arrow_forward
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