Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
thumb_up100%
Chapter 23, Problem 17CQ
(a)
To determine
Profit of R.
(b)
To determine
The marginal revenue and marginal cost of the firm.
(c)
To determine
The profit maximizing price of the seller.
(d)
To determine
The profit maximizing output of the seller.
(e)
To determine
The profit and the output of the seller.
(f)
To determine
The profit maximizing level with the marginal revenue and the marginal cost.
(g)
To determine
The impact of the seller.
(h)
To determine
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Practice #6
Francine is a a dental floss tycoon living in Montana. She faces the following demand curve for her product:
Price ( in $/unit) Quantity demanded
2.50 1000
2.20 2000
1.90 3000
1.60 4000
1.30 5000
1.00 6000
.70 7000
.40 8000
Francine has been told by her brother, who is currently taking a marketing class, that if she lowers her price by one increment(for example; changing price from .70 to .40, she will capture market share and increase total revenue. All of her advisors within the company have assured Francine that her brother's advice may be correct, BUT the above demand curve will not change. Assume that Francine knows the above demand curve will not change and is also considering her brother's advice. The prices can only change in…
Given the supply and demand schedules for calculators shown below, what is the market’s equilibrium price?
Demand Schedule for Calculators
Supply Schedule for Calculators
Price ($)
Quantity
Price ($)
Quantity
50
0
50
16
40
4
40
12
30
8
30
8
20
12
20
6
10
16
10
3
1
20
1
0
You own a bakery and shop that makes and sells gourmet doggie treats. You have done
market research and you know with certainty that your product is a normal good, not an
inferior good. The current demand function for your gourmet doggie treats is:
QD = 480 -6*P
which of course means the equation for your current demand curve is:
P = 80 -(1/6)*Q
You are opening a new shop in a new part of town, and you know that incomes in that part of
town are much lower than incomes are where your shop is now. Which of the following is
most likely the demand curve in your new shop?
Multiple Choice
O
P=68- (1/6)*Q
P = 102 - (1/6)*Q
P=92-(1/6)*Q
P = 88 - (1/6)*Q
Chapter 23 Solutions
Economics: Private and Public Choice (MindTap Course List)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $20, $12, $8, $4, and $2 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $8, $12, $20, $32, and $44 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Price Quantity Demanded Quantity Supplied ($ per widget) (widgets) (widgets) $2 $4 $8 $12 $20 $32 $44 In this market, the equilibrium price will be______ per widget, and the equilibrium quantity will be ___ (#) widgets.arrow_forwardFemi's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Femi Initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Femi's HookNLadder. As the graph shows, in order to sell the additional fire truck; Femi must lower the price from $160,000 to $120,000 per truck. Notice that Femi gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial five 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 five engines by selling at $120,000 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $120,000. PRICE (Thousands of dollars per fire engine) 8 8 2 2 2 2 8 2 2 2 20 220 200 180 160 140 120 100 60 40 0 2 3…arrow_forwardThe widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $18, $14, $12, $6, and $3 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $12, $14, $18, $28, and $34 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Quantity Demanded Quantity Supplied (widgets) (widgets) Price ($ per widget) $3 $6 $12 $14 $18 $28 $34 In this market, the equilibrium price will be per widget, and the equilibrium quantity will be 4 5 0 3 1 2 widgets.arrow_forward
- you own a small cineplex theater with 200 seats. the demand for seats is Q=3000-20P. you are charging rm6.50 per ticket and selling tickets to 160 people. your costs are fixed at rm125 and do not depend on the number of people attending. should you cut your price to fill the theatee? explain. what other pricing policies might you use to increase your profits?arrow_forwardThe widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $30, $20, $10, $5, and $3 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $10, $20, $30, $38, and $44 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Quantity Demanded Quantity Supplied (widgets) Price ($ per widget) $3 $5 $10 $20 $30 $38 $44 (widgets)arrow_forwardIf you are selling Mercedes-Benz cars in your showroom, what product "substitutes" are available to your prospective customers?arrow_forward
- The following chart tells you the willingness to pay (WTP) for generic and custom refrigerators for three types and the number of each type on your market. Each refrigerator costs $200 to make the generic and $250 to make the custom. High Value Medium Value Low Value #of each type 20 30 30 Value for generic 600 500 175 Total value for Custom 750 575 200 If you were only to sell the generic refrigerator, what price should you set? If you were to sell both refrigerator types, what price should you set for the custom refrigerator?arrow_forwardJoe has moved to a small town with only one golf course. His demand curve is P = 120 – 2Q where Q is the number of rounds of golf he plays per year. The manager of the golf course offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds of golf as he wants to at $20 per round. The golf course’s Marginal Cost is $20. - If the golf course wishes to implement a two-part pricing model, what membership fee will maximize revenue for the golf course? Please show your calculations. - How many rounds of golf will Joe play per year (calculate the value of Q*)? Please explain. - Would someone who just occasionally plays golf (perhaps 1 or 2 rounds once every 2 months) prefer two-part pricing as given above, or would they prefer to pay a price of $100 per round without any membership fee? Please explain.arrow_forwardFrancine is a a dental floss tycoon living in Montana. She faces the following demand curve for her product: Price ( in $/unit) Quantity demanded 2.50 1000 2.20 2000 1.90 3000 1.60 4000 1.30 5000 1.00 6000 .70 7000 .40 8000 Francine has been told by her brother, who is currently taking a marketing class, that if she lowers her price by one increment(for example; changing price from .70 to .40, or raising price from .40 to .70) she will capture market share and increase total revenue. All of her advisors within the company have assured Francine that her brother's advice may be correct, BUT the above demand curve will not change. Assume that Francine knows the above demand curve will not change and is also considering her brother's advice. The prices can only…arrow_forward
- Daffy’s is a pet care company that recently increased the average price of its services by 5%. As a result, the number of customers dropped by 4%. Buffy’s, a pet adoption company, opens up right next door to Daffy’s. How will this likely impact the demand for services at Daffy’s?arrow_forwardAT&T. It is early in the days of cellular (or mobile) telephony, and you are the price manager for AT&T's cell phone plan. It has been determined that there are two market segments: low-value consumers and high-value consumers. For simplicity, assume that all consumers within a segment are identical. A consumer in the low-value segment has monthly demand (measured in number of minutes) of Q, (p) = 80 - p, and a consumer in the high-value segment has monthly demand of QH (P) = 100 -p, where p is in cents per minute. a. Assume AT&T charges a flat price per minute with no membership fee. Derive the expression for consumer surplus for a low-value consumer and for a high-value consumer as a function of the price, p. Low-value consumer surplus, CS, (p): = High-value consumer surplus, CS, (p) = Show Transcribed Text Assume AT&T's marginal cost is a constant 10 cents per minute. You have decided to use a two-part tariff and must choose the monthly fixed fee f and the per-minute charge p. There…arrow_forwardQ2. Your brother is considering two cell phone providers i.e. UFONE and MOBILINK. UFONE charges Rs.520 (super card) per month for the service regardless of the number of phone calls made. MOBILINK does not have a fixed service fee but instead charges Rs. 1 per minute for calls. Your brother's monthly demand for minutes of calling is given by the equation Q = 150 - 50P, where P is the price of a minute a. With each service provider, what is the cost to your brother of an extra minute on the phone? b. In light of your answer to (a) part, how many minutes would your brother talk on the phone with each service provider? c. How much would he end up paying each provider every month?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning