Economics (7th Edition) (What's New in Economics)
7th Edition
ISBN: 9780134738321
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 16, Problem 16.3.12PA
To determine
Application of two-part tariff pricing.
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Check out a sample textbook solutionStudents have asked these similar questions
Imagine that you run the toll authority for a city bridge. You must charge all of your customers the exact same toll. Initially, you have set the price at
$2 per trip. The blue line on the following graph shows the weekly demand curve for trips across the city bridge.
On the following graph, use the purple rectangle (diamond symbols) to shade the area representing the total weekly revenue when the toll is $2 on
the graph. Notice that when you click on the rectangle, the area is displayed.
(?
10
TR at $2
8
Demand
7
TR at $3
5
2
1
8
12
16
20
24
28
32
38 40
QUANTITY (Thousands of vehicles per week)
An advisor has suggested that
you raise the toll to $3, the toll authority would bring in more revenue. To analyze this, use the green rectangle
(triangle symbols) to shade the area representing the total weekly revenue when the toll is $3 on the graph.
When the toll is $2, total revenue is S
per week, but when the toll is $3, total revenue is $
per week.
Based on your analysis, you can…
Imagine that you run the toll authority for a city bridge. You must charge all of your customers the exact same toll. Initially, you have set the price at $2 per trip. The blue line on the following graph shows the weekly demand curve for trips across the city bridge.
On the following graph, use the purple rectangle (diamond symbols) to shade the area representing the total weekly revenue when the toll is $2 on the graph. Notice that when you click on the rectangle, the area is displayed.
An advisor has suggested that if you raise the toll to $3, the toll authority would bring in more revenue. To analyze this, use the green rectangle (triangle symbols) to shade the area representing the total weekly revenue when the toll is $3 on the graph.
When the toll is $2, total revenue is _________ thousand per week, but when the toll is $3, total revenue is_________ thousand per week.
Based on your analysis, you can conclude that your advisor is ________ in suggesting that…
Imagine that you run the toll authority for a city bridge. You must charge all of your customers the exact same toll. Initially, you have set the price at
$7 per trip. The blue line on the following graph shows the daily demand curve for trips across the city bridge.
On the following graph, use the purple rectangle (diamond symbols) to shade the area representing the total daily revenue when the toll is $7 on the
graph. Notice that when you click on the rectangle, the area is displayed.
TOLL (Dollars per vehicle)
10
9
8
7
4
2
1
0
0
Demand
10 20 30 40 50 60 70 80
QUANTITY (Thousands of vehicles per day)
90
When the toll is $7, total revenue is $
100
TR at $7
TR at $8
An advisor has suggested that if you raise the toll to $8, the toll authority would bring in more revenue. To analyze this, use the green rectangle
(triangle symbols) to shade the area representing the total daily revenue when the toll is $8 on the graph.
thousand per day, but when the toll is $8, total revenue is $
Based…
Chapter 16 Solutions
Economics (7th Edition) (What's New in Economics)
Ch. 16 - Prob. 16.1.1RQCh. 16 - Prob. 16.1.2RQCh. 16 - Prob. 16.1.3PACh. 16 - Prob. 16.1.4PACh. 16 - Prob. 16.1.5PACh. 16 - Prob. 16.1.6PACh. 16 - Prob. 16.2.1RQCh. 16 - Prob. 16.2.2RQCh. 16 - Prob. 16.2.3RQCh. 16 - Prob. 16.2.4PA
Ch. 16 - Prob. 16.2.5PACh. 16 - Prob. 16.2.6PACh. 16 - Prob. 16.2.7PACh. 16 - Prob. 16.2.8PACh. 16 - Prob. 16.2.9PACh. 16 - Prob. 16.2.10PACh. 16 - Prob. 16.2.11PACh. 16 - Prob. 16.2.12PACh. 16 - Prob. 16.2.13PACh. 16 - Prob. 16.2.14PACh. 16 - Prob. 16.2.15PACh. 16 - Prob. 16.3.1RQCh. 16 - Prob. 16.3.2RQCh. 16 - Prob. 16.3.3RQCh. 16 - Prob. 16.3.4PACh. 16 - Prob. 16.3.5PACh. 16 - Prob. 16.3.6PACh. 16 - Prob. 16.3.7PACh. 16 - Prob. 16.3.8PACh. 16 - Prob. 16.3.9PACh. 16 - Prob. 16.3.10PACh. 16 - Prob. 16.3.11PACh. 16 - Prob. 16.3.12PACh. 16 - Prob. 16.2CTECh. 16 - Prob. 16.3CTE
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