a. What are the profit-maximizing price and quantity? b. At the profit-maximizing price and quantity, what are the total profits or losses made by this firm?
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- Is a monopolistically competitive firm productively efficient? Is it allocatively efficient? Why or why not?Henry Potter owns the only wcU in town that pro-ducesclean drinking water. He faces the follO\\•ingdemand, marginal revenue, and marginal cost curves:Demand: P • 70 - QMarginal Revenue: MR • 70 - 2Q~arginal Cost: MC • lO + Qa. Graph these three curves. Assuming thatMr. Potter maximizes profit, what quantity docshe produce? What prioc does he charge? Showthese rcsuiiS on your graph.b. Mayor George Bailey, concerned about water con~sumcrs_. is considering a price ceiling that is10 percent below the monopoly price derived inpart (a). What quantity would be demanded atthis new price? Would the profit-maximizingMr. Potter produce that amount? Explain. (Hi11t:1hink about marginal cost.)c. George's Uncle Billy says that a price ceiling is abad idea because price ceilings cause shortages.Is he right in this case? What size shortage wouldthe prioc ociling create? Explain.d. George's friend Clarence, who is even more con~cerncd about consumers, suggests a price ceiling50 percent below the…The following graph shows the daily demand curve for bippitybops in Chicago. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. Total Revenue 0 8 16 24 32 40 48 56 64 72 80 200 180 160 140 120 100 80 60 40 20 0 PRICE (Dollars per bippitybop) QUANTITY (Bippitybops per day) Demand A B Area: 1280 Calculate the daily total revenue when the market price is $180, $160, $140, $120, $100, $80, $60, and $40 per bippitybop. Then, use the green point (triangle symbol) to plot the daily total revenue against quantity corresponding to these market prices on the following graph. Total Revenue 0 8 16 24 32 40 48 56 64 72 80 3840 3520 3200 2880 2560 2240 1920 1600 1280 960 640 320 0 TOTAL REVENUE (Dollars) QUANTITY (Bippitybops per day) According to the midpoints formula, the price elasticity of demand between points A and B on the initial graph is approximately . Suppose the…
- The table below contains some revenue and cost data for the Rising Moon T-shirt Company (quantities for packets of a dozen shirts), which is in long-term equilibrium.a. Complete the blanks in the following table. Round your answers in the "AC" column to 2 decimal places. Quantity Price TR MR TC MC AC 0 / $ / / $128 / / 1 70 160 2 136 190 3 198 230 4 256 272 5 310 315 6 360 360 7 406 406 8 448 453 b. What is the profit-maximizing price and output for Rising Moon? Price: $ Output: c. At the profit-maximizing output, what are MC and MR? MC: $ MR: $ d. At the profit-maximizing output, what are AC and AR? Round your AC answer to 2 decimal places. AC: $ AR: $ e. Given your answers above, what type of market must Rising Moon be operating in?2. You are the Southeastern Michigan regional manager at Coca-Cola, responsible forproduction and pricing in the Metro Detroit area. Your primary competitor is Pepsi. The marketresearch team at Coca-Cola is thinking about launching a new product, Orange Vanilla Coke, toboost the brand. The cost function to produce a 12-pack of 12 fl. oz. cans of Orange VanillaCoke is C(qcoke) = 0.25qcoke and the market research team has estimated inverse market demandfor a 12-pack of this new “pop” in Southeastern Michigan to be P = 10.25 – 0.00025Q. a. Assuming Pepsi decides not to produce a similar product, allowing Coca-Cola to maintainmonopoly power in the market for orange vanilla cola, what price and quantity will youchoose to maximize profit? How much profit does Coca-Cola earn?b. What price and quantity you would choose to maximize profit if Pepsi spies discover yourproduct before launch, allowing Pepsi to produce and launch an identical product at the sametime. For your answer, assume the cost…Exercise 6.3.Little Kona is a small coffee company considering entering a market dominated by Big Brewer. The benefits of each of them depend on whether or not the first enters and whether the second sets a high or low price: After analazing the graph, answer the following question: Great Brew threatens Little Kona by telling her, "If you go in, we're going to set a low price, so the best thing you can do is not get in." Do you think Little Kona should believe the threat? Why yes or why not?
- In reference to the attached chart, I was supposed to calculate the bundle prices and net profits. I got assistance, and here is the feedback: The Satisfying Smoothie's net profit is 10.00 - 5.00 = 5.00. The Hydration Power Drink's net profit is 7.00 - 3.00 = 3.00. How is the net profit for Hydration Power Drink 3.00, when 7-3= 4? And Why would it be 7-3, and not 7-6?Explain Sweezy's kinked demand curveThe table above gives the demand schedule for Maritime Museum in Beşiktaş. What admission price should the MaritiME Museum charge for getting the maximum total revenue?
- According to Professor Kosmos, the demand for hot chocolate from the university café has the schedule QD = 2500 – 135p, where p is the price. The owner of the café says that their supply schedule is QS = 1600 + 315p. i) Identify the café’s daily profit maximising price and quantity. ii) When a new hot chocolate machine is installed, the Professor finds that the supply schedule has changed to QS = 1625 + 365p. What are the café’s new daily profit maximising price and quantity? iii) Find the price elasticity of demand for the café’s hot chocolate and comment on the result.How do I get the price elasticity number?? and how do I graph it? P Q Price Total Elasticity Revenue $9.00 1 - 9 $8.00 2 16 $7.00 3 21 $6.00 4 24 $5.00 5 25 $4.00 6 24 $3.00 7 21 $2.00 8 16Given Question #1 Cost function C= 3000+6Q Q = 4400 - 200Q - This is the demand function Q= 1600 P = 14 Profit= 22400-12600 = 9800 Question #2 Q=$480 - L Q=$1120- SA Question #3 Ed=−1.25 - L Ed=−0.55 - SA 0.5<0.8− markup index it is charging less. - L 0.64<-1/-0.55--markup index it is charging less. - SA Please answer question #5 A-C Given Question #2 Demand Function for San Antiono - Q=$1120- SA Question #3 Elasticity of Demand - Ed=−0.55 Markup - 0.64<-1/-0.55--markup index it is charging less
