An amusement park has 1 000 visitors every Saturday and charges $55 per person to enter the park. Research shows that for every $1 decrease in price, 25 more people will come to the park, and for every $1 increase in price, 25 fewer people will come to the park. The park has a maximum capacity of 1 600 people, and they must have more than 800 visitors to break even. What price should they charge to maximise their revenue, to the nearest dollar?
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- Would you rather have efficiency or variety? That is, one opportunity cost of the variety of products we have is that each product costs more per unit than if there were only one kind of product of a given type, like shoes. Perhaps a better question is, What is the right amount of variety? Can there be too many varieties of shoes, for example?What is predatory pricing?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?
- 1. Hertz and other car rental companies charge much more to rent luxury cars such as Ferraris andBentleys than to rent compact cars such as the Toyota Yaris or Chevrolet Sonic. Is this pricediscrimination? Explain 2. A Grocery store issued frequent-buyer cards to willing customers and collected information about their purchases. How should a manager use this information to offer customized discount coupons to individuals?2. Suppose you are the manager of a local restaurant. Prior to COVID-19 you served an average of 300 meals a day at a price of $15. You are trying to stay open even though restaurants are limited to 50% capacity. To offset the reduced seating capacity you raised your price to $18 and are now serving 160 meals a day with both dine in and take out. Compute the Total Revenue for your restaurant at the $15 price and the total revenue at the new $18 price. Did your total revenue rise or fall? Use the mid-point formula to calculate the price elasticity of demand between these two price points. Does this represent Elastic or Inelastic demand? Finding it difficult the keep the restaurant open at 50% you consult with a local Economist who suggests that you should try reducing your prices to bring in more customers. You drop your price down to $16 and find that sales increased to 200 customers a day. Compute the Total Revenue for the restaurant at the new $16 price. How does this compare…Question#5Nile.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 Using the midpoint method, calculate the price elasticities of demand for group A and group B.Explain how the discount will affect total revenue from each group.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?
- (8) a.) (4) The United States Postal Service (USPS) charged $0.58 per stamp in 2022. They allow stamps.com to sell a sheet of twenty stamps with personalized photos for $1.20 per stamp. Stamps.com keeps the extra beyond the $0.58 it pays the USPS. If stamps.com is acting as a profit maximizing monopolist, what is their Lerner Index and what is the price elasticity of demand for a customized stamp? b.) (4) Suppose a movie theater determines that the elasticity of demand for movie tickets is -2.0 for senior citizens and –1.5 for adults under age 65, and the marginal cost is $4 per consumer. Use the Lerner index to determine the price senior citizens should be charged and the price adults under age 65 should be charged in order to maximize profits.AFTER READING THE PARAGRAPH ANSWER THE QUESTION : On Wednesday April 8, Starbucks announced that itexpects its fiscal second-quarter earnings to be cutnearly in half as the coronavirus pandemic causessales to plunge in its two largest markets. What wouldbe the right pricing strategy to maximize revenues forStarbucks in the current circumstances? In January 2020, Starbucks raised their beverage prices by an average of1% across the U.S, a move that represented the company’s firstsignificant price increase in 18 months. I failed to notice because the pricechange didn’t affect grande or venti (medium and large) brewed coffeesand I don’t mess with smaller sizes, but anyone who purchases tall size(small) brews saw as much as a 10 cent increase. The company’s thirdquarter revenue rose 25% to $417.8 million from $333.1 million a yearearlier, and green coffee prices have plummeted, so what gives?Starbucks claims the price increase is due to rising labor and non-coffeecommodity costs, but with…The diagram below shows a demand line (green) and revenue curve (red) for a certain good. The horizontal axis is price in £. For the demand line, the vertical axis gives the number of units sold. For the revenue curve, the units of the vertical axis are £. Explain briefly how you can tell just by looking at the graphs that I must have gone wrong plotting the revenue curve, find the equation of the green line, the demand ? in terms of price, the correct equation of the revenue curve and the maximum revenue.
- 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?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.