Macroeconomics: Principles, Problems, & Policies
20th Edition
ISBN: 9780077660772
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 3, Problem 7P
Subpart (a):
To determine
Equilibrium price and quantity.
Table – 1 shows the value of quantity demanded and quantity supplied by the apartment:
Table -1
Monthly rent | Apartment demanded | Apartment supplied |
2,500 | 10,000 | 15,000 |
2,000 | 12,500 | 12,500 |
1,500 | 15,000 | 10,000 |
1,000 | 17,500 | 7,500 |
500 | 20,000 | 5,000 |
Subpart (b):
To determine
Equilibrium price and quantity.
Table – 1 shows the value of quantity demanded and quantity supplied by the apartment:
Table -1
Monthly rent | Apartment demanded | Apartment supplied |
2,500 | 10,000 | 15,000 |
2,000 | 12,500 | 12,500 |
1,500 | 15,000 | 10,000 |
1,000 | 17,500 | 7,500 |
500 | 20,000 | 5,000 |
Subparts (c):
To determine
Equilibrium price and quantity.
Table – 1 shows the value of quantity demanded and quantity supplied by the apartment:
Table -1
Monthly rent | Apartment demanded | Apartment supplied |
2,500 | 10,000 | 15,000 |
2,000 | 12,500 | 12,500 |
1,500 | 15,000 | 10,000 |
1,000 | 17,500 | 7,500 |
500 | 20,000 | 5,000 |
Subpart (d):
To determine
Equilibrium price and quantity.
Table – 1 shows the value of quantity demanded and quantity supplied by the apartment:
Table -1
Monthly rent | Apartment demanded | Apartment supplied |
2,500 | 10,000 | 15,000 |
2,000 | 12,500 | 12,500 |
1,500 | 15,000 | 10,000 |
1,000 | 17,500 | 7,500 |
500 | 20,000 | 5,000 |
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
A few years ago, the Boston Globe reported that the city of Boston planned to spend $14 million to convert the FleetCenter sports arena and entertainment center into an appropriate venue for the Democratic National Convention (DNC). The city engaged Shawmut Design and Construction in a contractual relationship to complete the work, which was supposed to start 48 days prior to the commencement of the DNC on July 26. However, when negotiations between Boston’s mayor and the police union broke down, the Boston Police Patrolmen’s Association took to the picket lines surrounding the FleetCenter and prevented construction crews from beginning the work. The Globe reported that “a truck attempting to deliver steel turned around after a crowd of union members stood at a chain-link gate in front of the arena, shouting ‘back it up,’ and ‘respect the line, buddy.’” Moreover, the Globe reported that “On-duty police officers, who had been instructed to prevent pickets from restricting access, did…
Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is
p=140-2q,
where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates
separately with each person who joins the club and can therefore charge individual prices. This manager has a good
idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can
play as many rounds as he wants at $20, which is the marginal cost his round imposes on the Club.
Joe marries Susan, who is also an enthusiastic golfer. Susan wants to join the Northlands Club. The manager believes
that Susan's inverse demand curve is
p=120-2q.
The manager has a policy of offering each member of a married couple the same two-part prices, so he offers them both
a new deal. What two-part pricing deal maximizes the club's profit? Will this new pricing have a higher or lower access
fee than in Joe's original deal?…
Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is
p = 140-2q,
where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a
special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $40, which is the marginal cost his round imposes on the Club.
Joe marries Susan, who is also an enthusiastic golfer. Susan wants to join the Northlands Club. The manager believes that Susan's inverse demand curve is
p = 120-2q.
The manager has a policy of offering each member of a married couple the same two-part prices, so he offers them both a new deal. What two-part pricing deal maximizes the club's profit? Will this new pricing have a higher or lower access fee than in Joe's original…
Chapter 3 Solutions
Macroeconomics: Principles, Problems, & Policies
Ch. 3.A - Prob. 1ADQCh. 3.A - Prob. 2ADQCh. 3.A - Prob. 3ADQCh. 3.A - Prob. 4ADQCh. 3.A - Prob. 5ADQCh. 3.A - Prob. 6ADQCh. 3.A - Prob. 7ADQCh. 3.A - Prob. 1ARQCh. 3.A - Prob. 2ARQCh. 3.A - Prob. 3ARQ
Ch. 3.A - Prob. 4ARQCh. 3.A - Prob. 5ARQCh. 3.A - Prob. 6ARQCh. 3.A - Prob. 1APCh. 3.A - Prob. 2APCh. 3.A - Prob. 3APCh. 3.6 - Prob. 1QQCh. 3.6 - Prob. 2QQCh. 3.6 - Prob. 3QQCh. 3.6 - Prob. 4QQCh. 3 - Prob. 1DQCh. 3 - Prob. 2DQCh. 3 - Prob. 3DQCh. 3 - Prob. 4DQCh. 3 - Prob. 5DQCh. 3 - Prob. 6DQCh. 3 - Prob. 7DQCh. 3 - Prob. 8DQCh. 3 - Prob. 1RQCh. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 1PCh. 3 - Prob. 2PCh. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Prob. 6PCh. 3 - Prob. 7P
Knowledge Booster
Similar questions
- Exercise A.9 You are an executive of Super Computer, INC. (SC), which rents supercomputers. SC receives a fixed rent for a period of time in exchange for the right to use unlimited computers equal to P cents per second. SC has two types of potential clients of equal numbers: 10 companies and 10 academic institutions. Each company has the demand function Q = 10 – P, where Q is expressed in millions of seconds per month; each academic institution has the demand Q = 8 – P. The marginal cost to SC of additional computer utilization is 2 cents per second, regardless of volume. a) Suppose you can distinguish companies from academic clients. What rental and usage fee would you charge each group? Calculate the profits you would get? b) Suppose that you cannot separate the two types of customers and that you did not charge a rental fee. What usage quota would maximize your profits? How many benefits would you get?arrow_forwardJoe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is p = 120-2q, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $40, which is the marginal cost his round imposes on the Club. What membership fee would maximize profit for the Club? The manager could have charged Joe a single price per round. How much extra profit does the Club earn by using two-part pricing? The profit-maximizing membership fee (F) is $ . (Enter your response as a whole number.)arrow_forwardJoe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is p = 120 - 2q, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $20, which is the marginal cost his round imposes on the club. What membership fee would maximize profit for the club? The manager could have charged Joe a single price per round. How much extra profit does the club earn by using two-part pricing?arrow_forward
- Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is p=200-2q, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $20, which is the marginal cost his round imposes on the Club. What membership fee would maximize profit for the Club? The manager could have charged Joe a single price per round. How much extra profit does the Club earn by using two-part pricing? The profit-maximizing membership fee (F) is $. (Enter your response as a whole number.)arrow_forwardJoe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is p= 200 - 2q, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $40, which is the marginal cost his round imposes on the Club. What membership fee would maximize profit for the Club? The manager could have charged Joe a single price per round. How much extra profit does the Club earn by using two-part pricing? The profit-maximizing membership fee (F) is $ 6400 . (Enter your response as a whole number.) The Club's extra profit (above what its profit would have been from charging a single per-round price) is $ (Enter your response as a whole number.)arrow_forwardJoe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is p = 120 - 2g, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $20, which is the marginal cost his round imposes on the Club. Joe marries Susan, who is also an enthusiastic golfer. Susan wants to join the Northlands Club. The manager believes that Susan's inverse demand curve is p = 100 - 2q. The manager has a policy of offering each member of a married couple the same two-part prices, so he offers them both a new deal. What two-part pricing deal maximizes the club's profit? Will this new pricing have a higher or lower access fee than in Joe's…arrow_forward
- Consider the market equilibrium for office space in the graph on the right. Then illustrate the following change in equilibrium with new supply and demand curves. During the high-tech boom in the late 1990s, San Jose office space was in very high demand and rents were very high. With the national recession that began in March 2001, however, the market for office space in San Jose (Silicon Valley) was hit very hard, and demand decreased. Assume for simplicity that no new office space was built during the period. 1.) Using the line drawing tool, show the result of the change in the demand and supply curves as specified above. Properly label the lines. Carefully follow the instructions above and only draw the required objects. Price ($) Market for Office Space Quantity Doarrow_forwardQuestion 6 Suppose that a firm currently sells its product at a price of P = 30. The firm has recently discovered that there are some "high demand" costumers, with individual demand functions Q(P) = 40-P. The firm wants to offer a "contract" to these costumers which would allow them for a fixed fee F to purchase the good for 20 Dollars per unit. Determine the maximum value of F that the firm could charge such that high demand costumers would be willing to buy the contract. F =arrow_forwardExercise A.9 You are an executive of Super Computer, INC. (SC), which rents supercomputers. SC receives a fixed rent for a period of time in exchange for the right use unlimited computers equal to P cents per second. SC has two types of potential clients of equal numbers: 10 companies and 10 academic institutions. Each company has the demand function Q = 10 - P, where Q is expressed in millions of seconds per month; each academic institution has the demand Q = 8 - P. The marginal cost to SC of additional computer utilization is 2 cents per second, regardless of volume. a) Suppose you can distinguish companies from academic clients. What rental and usage fee would you charge each group? Calculate the profits you would get? b) Suppose that you cannot separate the two types of customers and that you did not charge a rental fee. What usage quota would maximize your profits? How many benefits would you get?arrow_forward
- Suppose that managers at Honda are deciding how to price the new Honda Accord. The managers estimate that their total costs increase by $20,000 for each car they produce. They also estimate the demand curve they face; it is described by the equation: Q = -0.4 P + 16,000, where Q represents the quantity of Honda Accords they will sell and P represents the price they charge in US dollars. We can re-write that demand curve as: P = 40,000 - 2.5 Q. Take every possibly quantity that the managers might choose between and 7,000 in units of 100. For each possible quantity, calculate the associated price the managers would need to charge, the revenue they would earn, and the total costs. You can then calculate profits for each level of quantity. Highlight the cell that contains the highest value of profit. Finally, you can also approximate marginal revenue here as the change in total revenue after the next 100 cars are produced. At what quantity does marginal revenue roughly equal marginal cost?…arrow_forwardSuppose that managers at Honda are deciding how to price the new Honda Accord. The managers estimate that their total costs increase by $20,000 for each car they produce. They also estimate the demand curve they face; it is described by the equation: Q = -0.4 P + 16,000, where Q represents the quantity of Honda Accords they will sell and P represents the price they charge in US dollars. We can re-write that demand curve as: P = 40,000 - 2.5 Q. Take every possibly quantity that the managers might choose between 0 and 7,000 in units of 100. For each possible quantity, calculate the associated price the managers would need to charge, the revenue they would earn, and the total costs. You can then calculate profits for each level of quantity. Highlight the cell that contains the highest value of profit.arrow_forwardPlease match the following: ✓ Assume that both the demand curve and the supply curve for DVD players shift to the left but the demand curve shifts more than the supply curve. As a result ✓ Assume that both the demand curve and the supply curve for DVD players shift to the left but the supply curve shifts more than the demand curve. As a result ✓ Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right, but the supply curve shifts more than the demand curve. As a result ✓ Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right, but the supply curve shifts less than the demand curve. As a result A. Both the equilibrium price and quantity of DVD players will increase. B. Both the equilibrium price and quantity of DVD players will decrease. C. The equilibrium price of DVD players will increase; the equilibrium quantity will decrease. D. The equilibrium price of…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education