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1. The marginal
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- profile-image Time remaining: 00 : 09 : 46 Accounting Statement) Consider a product X that nobody would buy for $700 or more. Conversely, for every $2 that the price drops, the demand for this product will increase by 1 unit. The variable cost per unit of product X is $100. 1a) Let p indicate the price of the product and q quantities demanded by the market. Which equation better describes the relationship between p and d? a) q = 600p – 2p2 b) q = 700 – 2p – 100 c) q = (700 - p) / 2 d) q = 2 – 700p 1b. If Company A is a monopolist supplying product X, which quantity p maximizes Company A's profit? a) 38 b) 75 c) 19 d) 150 1c. Consider a von Stackelberg Duopoly. If a second company, Company B, also supplies product X and enters the market to compete with Company A. What is the expected price of the product? a) $174 b) $400 c) $250 d) $93 1d. Consider a von Stackelberg Duopoly. If a third company, Company C, also supplies product X and enters the market to…Suppose that the supply and demand schedules for a local electric utility are as follows:Price 17 16 15 14 13 12 11Quantity supplied 9 7 5 3 1 - -Quantity demanded 3 4 5 6 7 8 9The price is in cents per kilowatt hour (kWh), and the quantity is millions of kilowatt hours. The utilitydoes not operate at prices less than 13 cents per kWh.(a) Using graph paper and a ruler, or a computer spreadsheet or presentation program, carefully graphand label the supply curve for electricity.(b) On the same graph, draw and label the demand curve for electricity.(c) What is the equilibrium price of electricity? The equilibrium quantity? Label this point on yourgraph.(d) At a price of 17 cents per kWh, what is the quantity supplied? What is the quantity demanded? Whatis the relationship between quantity supplied and quantity demanded? What term do economists useto describe this situation?(e) At a price of 14 cents per kWh, what is the relationship between quantity supplied and quantitydemanded? What…E1 Agroscience Company, Cypress, TX manufactures a certain product with estimated variable costs, per unit, V =0.10Q – 40 and aggregated fixed costs of $40,000. The price-quantity demand relationship for this product is P = −0.5Q + 900, where P is the unit sales price of the product and Q is the annual quantity demand. ● Total cost = Fixed cost + Variable cost ● Revenue = Quantity Demand × Price ●Profit = Revenue − Total cost a) Develop the equations for total cost and total revenue. b) Find the breakeven quantity. c) What profit is earned if i) total cost is minimized and ii) total revenue is maximized? d) Which of the strategy will be better for the company to adopt to optimize their profit, is it to minimize total cost or maximize total revenue? Give reason for your choice. e) What is the company’s maximum possible profit?
- : A fixed cost of $50 thousand was incurred in setting up an operation. At time t months thereafter, the operation yields income at the rate of (20 – 0.3t) and incurs expenses at the rate of (10 – 0.1t); where both are in thousands of dollars per month. Sketch the graph. What is the optimal time to terminate the operation? What will total profit be at the optimal time of termination? Q#5: At market equilibrium, consumers demand 625,000 gallons of kerosene, whose supply function is, Ps(q) = 2.5 + 0.3 q3/2 , where q is in thousands of gallons and Ps(q) is in dollars per gallon. Compute producers’ surplus. Q#6: The demand function for a product is Pd(q) = 80 / (0.2 q + 1)2 , where q is in millions of tons and Pd (q) is in dollars per ton. Market equilibrium occurs at a demand for 15 million tons. Compute consumers’ surplus.Price per bushel Quantity Demanded (bushels) Quantity Supplied (bushels) US$2 40,000 0 4 36,000 4,000 6 30,000 8,000 8 24,000 16,000 10 20,000 20,000 12 18,000 28,000 14 12,000 36,000 16 6,000 40,000 How many bushels will be sold if the market price is US$6 per bushel? If the market price is US$6 per bushel, what must happen to restore equilibrium in the market? At what price will suppliers be able to sell 36,000 bushels of wheat? Suppose the market price is US$14 per bushel. Is there a shortage or a surplus in the market? What is the quantity of the shortage or surplus? How many bushels will be sold if the market price is US$14 per bushel? If the market price is US$14 per bushel, what must happen to restore equilibrium in the market?A ski resort in the White Mountains has conducted market and cost studies, and has determined that the demand and supply for ski-lift tickets at their resort are represented by: Qd=1750 - 5P - 8PR + 2PB; Qs=50 + 20P - 3PE. In these equations, P represents the price of a full-day lift ticket, in dollars per ticket; PR is the price of a ski-rental package; PB is the price of a pint of beer at the local pub in the nearby town; and PE is the price per megawatt hour for the electricity used to run the chair lifts on the ski slopes. Based on the equations above, determine whether the beer in the local pub is a substitute or complement to skiing. Briefly explain your answer. Suppose the price of a ski-rental package is $20, the price of a pint of beer is $5, and the price of electricity is $150 per megawatt hour. Calculate equilibrium price and quantity of ski-lift tickets. Now consider the more general relationship between the price of lift tickets and the price of ski-rental packages.…
- The quantity demanded for the Sony VCR model 37 is 2500 per week when the unit price is $700. For each increase in unit price of $50, the quantity demanded decreases by 250 units. The suppliers will provide 2500 units when the price is $800 per unit, and they will not supply any units for $500 or less. (Note: Define your variables.) A. Algebraically determine the supply equation. (Place in function form.) B. Algebraically determine the demand equation. (Place in function form.) C. Algebraically determine the equilibrium quantity and price. D. At what price does excess supply occur?SITUATION: You are thinking about becoming a Paradise Coffee franchisee. Franchisees are offered a business specializing in producing an exclusive line of exotic coffee drinks (similar to Starbucks). Franchisees have had good success in towns without a Starbucks (Paradise franchises gross $220,000 sales on average per year, and you believe you can gross as much, too). You will have to pay Paradise Coffee, Inc., a franchise fee of $3,000 a year plus 2.5% of gross sales. You will also pay an annual National advertising fee of 3% of gross sales. Paradise requires that you use their logo-imprinted goods (plates, cups, napkins). They are purchased in bulk from Paradise and will cost you $40,000 per year. You also have to use their special Paradise Roast coffee beans, which cost $12.00 per pound. You estimate you will use 400 pounds of beans a year. Other food ingredients (syrups, biscotti, whipped cream, soft drinks, etc) will cost $18,000 a year. You will have to hire three…Q, The demand for product is 6000 unit per year and the items are withdrawn uniformly. The order costis 10003, the inventory holding costis 63 per item per year, assuming shortages cost 125, find the following: 1. The Economic order quantity. 2. Maximum Inventory. 3. Shortage quantity. 4. Frequency .
- In the supply equation; [Qdx=Px+1600], if Qdx=5688, then the price of the product is. Select one: a. 9100800.00 b. 4088.00 c. -4088.00 d. 7288.00Worldwide quarterly sales of a brand of cell phones were approximately q = −p + 156 million phones when the wholesale price was $p. (a) If the cellphone company was prepared to supply q = 4p − 384 million phones per quarter at a wholesale price of $p, what would have been the equilibrium price? $ (b) The actual wholesale price was $103 in the fourth quarter of 2004. Estimate the projected shortage or surplus at that price. There is an estimated ______ of million phones.Qd= 65 – 10P Qs= -35 + 15P How do you interpret market equilibrium: (i) if P= Rs.6? (ii) if P=2? Show on the Demand-Supply diagram in (a), the graphical interpretation of your answer of (b).
