. American Girl doll has an inverse demand curve of P= 150 - 0.25Q, where Q measures the quantity of dolls per day is the total surplus at the profit-maximizing output level? 9O $12,250 Correct $144,000 $18,120
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- American Girl doll has an inverse demand curve of P- 150 0.25Q, where Q measures the quantity of dolls per day and P is the price per doll. The marginal cost is given by MC 10+0.50Q. What is the total surplus at the profit -maximizing output level? 1)$12,250Correct2) $144,0003)$18,1204)$4,5001. The demand function for a certain brand of DVD is given byp = −0.01x^2− 0.2x + 8where p is the unit price in dollars and x is the quantity demanded each week,measured in units of a thousand. Determine the consumers’ surplus if the market price is set at $5 per disc. PART 2 of number 1: The supplier of the DVD in problem #1 will make x hundred units availablein the market when the unit price in dollars isp =√36 + 1.8xDetermine the producers’ surplus if the market price is set at $9 per unit. 2.The demand function for a certain kind of mattress is given byp = 600e^−0.04xwhere p is the unit price in dollars and x (in units of a hundred) is the quantity demanded each month.(a) Find the number of mattresses demanded per month if the unit price isset at $250 per mattress.(b) Use the results of part (a) to find the consumers’ surplus if the sellingprice is set at $250 per mattress. PART 2 of number 2: The manufacturer of the brand of mattress of problem #2 will make x hundred units…Suppose the following data represent the market demand for catfish: Price (per unit) $20 19 18 17 16 15 14 13 12 11Quantity demanded (units per day) 12 13 14 15 16 17 18 19 20 21Total revenue — — — — — — — — — —Marginal revenue — — — — — — — — — —Compute total and marginal revenue to complete the table above. At what rate of output is total revenue maximized? At what rate of output is MR less than price? At what rate of output does MR first become negative? Graph the demand and MR curves.
- 3. Suppose the movie theater has two types of customers: college students and senior citizens. Collegestudents have a willingness to pay $20 and senior citizens have a willingness to pay $5. The theaterpotentially has 10 college students and 20 senior citizen customers. The movie theater incurs no costwhen showing the movie, so profit is the same as revenue. How does total surplus change if themovie theater goes from charging a single price to perfectly price discriminating?Nile.com, the online bookseller, wants to increase its total revenue. One strategy is to offer a 10% discount on every book it sells. Nile.com knows that its customers can be divided into two distinct groups according to their likely responses to the discount. The accompanying table shows how the two groups respond to the discount. Group A Group B(sales per week) (sales per week) Volume of sales beforethe 10% discount 1.55 million 1.50 million Volume of sales afterthe 10% discount 1.65 million 1.70 million A. Using the midpoint method, calculate the price elasticities of demand for group A and group B. B. Explain how the discount will affect total revenue from each group.C. Suppose Nile.com knows which group each customer belongs to when he or she logs on and can choose whether or not to offer the 10% discount. If Nile.com wants to increase its total revenue, should discounts be offered to group A or to group B, to neither group, or to both groups?Nile.com, the online bookseller, wants to increase its total revenue. One strategy is to offer a 10% discount on every book it sells. Nile.com knows that its customers can be divided into two distinct groups according to their likely responses to the discount. The accompanying table shows how the two groups respond to the discount. Group A Group B(sales per week) (sales per week) Volume of sales beforethe 10% discount 1.55 million 1.50 million Volume of sales afterthe 10% discount 1.65 million 1.70 million A. Using the midpoint method, calculate the price elasticities of demand for group A and group B. B. Explain how the discount will affect total revenue from each group. C. Suppose Nile.com knows which group each customer belongs to when he or she logs on and can choose whether or not to offer the 10% discount. If Nile.com wants to increase its total revenue, should discounts be offered to group A or to group B, to neither group, or to both groups?
- 14. The only DVD rental club available to you charges $4 per movie per day. If your demand curve for movie rentals is given by P = 20 – 2Q, where P is the rental price ($/day) and Q is the quantity demanded (movies per year), what is the annual maximum fee you would be willing to pay to join the club?Price Quantity Demanded $10 0 $9 10 $8 20 $7 30 $6 40 $5 50 $4 60 Reference: Ref 13-7 Table: Lunch (Table: Lunch) Use Table: Lunch. This table shows market demand for picnic lunches for people taking all-day rafting trips on the river. Joe has a firm providing this service, and his marginal cost and average cost for each lunch are a constant $4. If Joe is a monopolist, what is consumer surplus in the long run? Select one: a. $45 b. $90 c. $360 d. $180Assuming you are the managing director of a firm that produces three goods: A, Band C. The price elasticity of demand for A is 1.2, for B it is 1.00 and for C it is 0.75.It is known that he firm is experiencing serious cash flow problems and you have toincrease total revenue as soon as possible. If you were in a position to set the pricesfor these goods, what would be your pricing strategy for each product
- Suppose a perfectly competitive market for hotdog stands in New York City becomes monopolistically competitive when gourmet, discount, andethnic hot-dog retailers show up, making eachcart slightly different. If hot dogs from differentstands are now imperfect substitutes and there arenumerous carts in the city, compare the producerand consumer surplus and total social welfarebefore and after the change1.Amalgamated Popcorn, Inc. sells bags of flavored gourmet popcorn in a popular mall. As shop owner and operator, you have observed that weekly popcorn sales are well-described by the demand equation: Q = 1,200 -800P + 2.0A, where A denotes advertising weekly spending (in dollars). You are currently charging $1.50 per bag of popcorn (for which the marginal cost is $.75) and spending $500 per week on advertising. a) Compute the store’s price elasticity and advertising elasticity. b) Check whether your current $1.50 price is profit maximizing. If not, determine the store’s optimal quantity and price. c) Should the store consider increasing its advertising spending? Why or why not.13: What is the Difference between predatory pricing, tie-in sales, and bundling? 14: At what Price should All Firms Produce at? 15: What should a Firm do for Pricing if it faces Elastic or Inelastic Demand?