A small village has only one Italian restaurant. The daily demand for dinners in this restaurant is P=120-2Q, where P is the price in £ and Q is the number of dinners. It has a fixed cost of £300 and a marginal cost of £10 for the first 15 dinners. If it wants to produce more than 15 dinners, it must pay overtime wages to its workers, with the marginal cost rising to £20. What is the maximum amount of profit the restaurant can earn? Illustrate your answer on a diagram.
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A small village has only one Italian restaurant. The daily demand for dinners in this restaurant is P=120-2Q, where P is the price in £ and Q is the number of dinners. It has a fixed cost of £300 and a marginal cost of £10 for the first 15 dinners. If it wants to produce more than 15 dinners, it must pay overtime wages to its workers, with the marginal cost rising to £20. What is the maximum amount of profit the restaurant can earn? Illustrate your answer on a diagram.
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- Suppose that there are two fancy hotels on the online booking platform, say W hotel and Ritz Carlton hotel. Each hotel has the capacity of 20 rooms on the New Year Eve. There are 20 families who are planning to stay at Bay Areas. Suppose that you are the manager and you set the price to maximize the hotel profit. The marginal cost of each hotel room = 500 RMB The largest valuation on the hotel room = 2000 RMB valuation decrease by 100RMS. In total, there are 20 families. Discuss with your peers how many rooms you will offer in the market.A company can successfully charge different prices in country A and B. Marginal cost is $10. Demands in country A and B are Q=20.5-P and Q=5-P respectively. What are the profit- maximising prices in two countries? What quantity do they sell in two countries? The company now added country C, and its demand is Q=20.5-P. What maximising prices do they charge in three countries? What quantity do they charge in three countries?Consider the following problem: Demand: q = 100-p Retailer: marginal cost of selling r = 10 per unit Manufacturer: marginal cost of producing = 40 per unit Neither firm faces any competitor Suppose now that the retailer and the manufacturer are separate firms. Write down the profit function of the manufacturer if it sells to the retailer at w. You solved for the quantity the manufacturer will sell a minute ago, so you can use that in the profit function, and then you will have a profit function for the manufacturer that does not have p, but only has w in it. Solve for the optimal w for the manufacturer to charge and calculate the quantitysold under that w.
- You are the manager of a pizzeria that produces at a marginal cost of $6 per pizza. The pizzeria is a local monopoly near campus (there are no other restaurants or food stores within 500 miles). During the day, only students eat at your restaurant. In the evening, while students are studying, faculty members eat there. If students have an elasticity of demand for pizzas of −4 and the faculty has an elasticity of demand of −2, what should your pricing policy be to maximize profits?Assume marginal cost is $40 in the summer and also in the winter. The daily demand for hotel rooms is given by p = 140 – q in summer and p = 100 – q in winter. There are only 40 rooms in the hotel. Which statement is true? A. The deadweight loss is positive in winter but zero in summer. B. The profit-maximizing price in summer = $90. C. The profit-maximizing price in winter = $60. D. The deadweight loss in both seasons are equal.Promoters of a major college basketball tournament estimate that the demand for tickets by adults is QA = 5,000 - 10P and the demand for tickets by students is QS = 10,000 - 100P. The marginal cost and average total cost of seating an additional spectator is constant, MC = $10, The promoters want to segment the market and charge adults and students different prices. What is the profit maximizing ticket price for students?
- The following graph shows the demand curve for a good and the long run average cost curve for a typical firm in this market. If the government does not intervene in the market, then Question 4 options: there will be many firms in this market, all of whom will take the market price as given and produce where price equals marginal cost there will only be 1 firm in this market, and they will produce where marginal revenue equals marginal cost there will only be 1 firm in this market, and they will take the price as given and produce where price equals marginal cost no firms will enter this marketBased on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD Demand :P =1000-10Q Total Revenue : TR=1000Q-10Q2 Marginal Revenue: MR=1000-20Q Marginal Cost: MC=100+10Q Where Q indicates the number of copies sold and P is the price in Ectenian dollasrs. a. Find the price and quantity that maximize the company's profit b. Find the price and quantity that would maximize social welfare c. Calculate the deadweight loss from monpoly. d. Suppose in addition to the costs above. the director of the film has to be paid. The company is considering four options i. a flat fee of 2000 Ectenian dollars ii. 50 percent of the profits. iii. 150 Ectenian dollars per unit sold iv. 50 percent of the revenue. For each option, calculate the profit-maximizing price and quantity. Which if any of these compensation schemes would alter the deadweight loss from monopoly. Explain.The selling price of a TV set is double that of its net cost. If the TV set is sold to a customer at a profit of 25% of the net cost, how much discount was given to the customer?
- The Broadway show Hamilton is coming to perform for one night. There are two types of consumers interested in the show- current students and rich alumni. The demand curve for the student market is Q= 300-0.4P with marginal revenue MR= 750-5Q. The demand curve for the alumni market segment is Q=600-0.1P with marginal revenue MR=6000-20Q. If the two types of consumers are in the market, the MR=1800-4Q. The cost function is C(Q)=200Q and the marginal cost of serving either customer is MC=200. 3. what is the profit-maximizing price charged to students? what is the profit-maximizing price charged to alumni?The Broadway show Hamilton is coming to perform for one night. There are two types of consumers interested in the show- current students and rich alumni. The demand curve for the student market is Q= 300-0.4P with marginal revenue MR= 750-5Q. The demand curve for the alumni market segment is Q=600-0.1P with marginal revenue MR=6000-20Q. If the two types of consumers are in the market, the MR=1800-4Q. The cost function is C(Q)=200Q and the marginal cost of serving either customer is MC=200. 1. Assume the show knows there are different types of consumers but can not tell the difference so they must sell tickets at a single price. At what price do all consumers enter the market? What profit-maximizing price and quantity are the tickets sold at?The Broadway show Hamilton is coming to perform for one night. There are two types of consumers interested in the show- current students and rich alumni. The demand curve for the student market is Q= 300-0.4P with marginal revenue MR= 750-5Q. The demand curve for the alumni market segment is Q=600-0.1P with marginal revenue MR=6000-20Q. If the two types of consumers are in the market, the MR=1800-4Q. The cost function is C(Q)=200Q and the marginal cost of serving either customer is MC=200. 2. How much total consumer surplus is generated?