Answered: Clothing companies like Vineyard Vines…

Question

Clothing companies like Vineyard Vines offer various student, teacher, military, and essential worker discounts. Let’s assume that the marginal cost of producing a classic Shep Shirt at Vineyard Vines is $30 per shirt. For people who don’t fall into the discount-eligible categories, the demand and marginal revenue equations are:

P_u = 200 - .5Q_u

MR_u = 200 – Q_u

For people who are discount-eligible, the demand and marginal revenue equations are given by:

P_d= 150 - .5Q_d

MR_d= 150 - Q_d

Assuming that price discrimination is possible, calculate the profit-maximizing price and quantity for each group of shoppers.

Ignoring fixed costs, calculate the profit Vineyard Vines would be able to make on this particular item if the company is able to engage in price discrimination.

Expert Solution

Want to see the full answer?

Check out a sample Q&A here

See Solution

Want to see the full answer?

See Solution Check out a sample Q&A here

View this solution and millions of others when you join today!

See Solution Check out a sample Q&A here

Students who’ve seen this question also like:

Microeconomic Theory

12th Edition

ISBN: 9781337517942

Author: NICHOLSON

Publisher: Cengage

Not helpful? See similar books

Microeconomic Theory

Monopoly. 14.10P

Students love us.

Related Economics Q&A

Find answers to questions asked by students like you.

Q: hich if the following is not one of the 3 types of Intellectual Property protection lect one: Оа.…

A: 1. Intellectual property assurance helps the economy. 2. Intellectual property insurance advances…

Q: Assume inverse demand function for game console in an imaginary country is P=1200-4Q and the total…

A: We are going to explain theoretically and mathematically to answer this question.

Q: Subject: Business Economics Q10) A monopolist firm has the following total cost function and demand…

A: QD PRICE TC MR MC 5 8 20 - - 6 7 22 2 2 7 6 25 0 3 8 5 29…

Q: Suppose that a firm with market power can perfectly price-discriminate and faces the demand function…

A: Profit maximisation condition occurs where mc=mr where price is high and quantity is less than that…

Q: Given the demand and cost functions as Q=140-P and C=Q2+20Q+300 What will be the profit maximizing…

A: Given : Q=140-P P = 140 - Q C=Q2+20Q+300

Q: For a monopsony firm, draw two well-labelled graphs of marginal expense (as well as supply and…

A: In the above diagram, represents the effect of minimum wage on monopsony market. Intersection of…

Q: If the inverse demand curve is p= 180 - Q and the marginal cost is constant at $20, how does…

A: Profit maximizing quantity is where MR = MC

Q: The government has announced its plans to license two firms to serve a market whose demand curve is…

A: P = 110 - Q

Q: Suppose a firm has a cost curve equal to Cost = 800 + 15q. 800 Marginal Cost = 15, and the Average…

A: Given, Cost curve= 800+15q Marginal cost= 15 Average cost= 800/q+15

Q: Under patent protection, a firm has a monopoly in the production of a high-tech component. Market…

A: TR = P x Q = 100Q - 0.2Q2 MR = dTR/dQ = 100 - 0.4Q Setting MR = MC for a monopoly, 100 - 0.4Q = 60…

Q: A monopolist earns $30 million annually and will maintain that level of profit indefinitely,…

A: Present value is an important mathematical concept in the ambit of Mathematical Economics. Present…

Q: A monopoly function for a firm given ? = 20 − 0.2? where ? is price and ? is output. Find (a) Total…

A: Given : P = 20 - 0.2 Q (a) Total Revenue = P×Q = 20 Q - 0.2 Q2

Q: Still using the graph on the left, shade and label the areas corresponding to the consumer and…

A: Click to see the answer

Q: As the manager of a monopoly, you face potential government regulation. Your inverse demand is P =…

A: Monopoly is the only seller of the product with no close substitutes.

Q: In a pure monopoly, modern technology means that some industries can only achieve efficient and…

A: Within a given market or industry, a pure monopoly is defined as a single supplier. In this case,…

Q: What is the background for the regulation of The Sherman Act, in 1890? What is the background that…

A: Click to see the answer

Q: Is Price Discrimination a case of monopoly only? If yes, then why and how? Why is it favorable to…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: pure monopsony buyer of a resource, in this case, labor L, has a marginal value curve for labor…

A: Monopsony is a single buyer which maximizes profit by hiring workers where marginal expenditure…

Q: Suppose the demand for a product X produced by a company AAA is given by the following function: QX…

A: Total revenue is the total amount collected by seller by selling the output at that price i.e. TR =…

Q: The demand curve in a monopoly market is given by the equation Q = 800-4P while the supply curve is…

A: a) QD=800-4PQS=200+2PNow,QD=QS800-4P=200+2P-4P-2P=200-8006P=600P=100Putting the value of P in demand…

Q: Is the statement true or false? When a demand curve is a downward sloping straight line, the slope…

A: The curve that represents the quantities and prices of the goods that buyers are in turn willing to…

Q: Polly’s Pet Store has a local monopoly on the grooming of dogs. The daily inverse demand curve for…

A: A market is a place where the buyers and the sellers interact with each other and the exchange of…

Q: a) Suppose the market for petrol in an economy is monopolised and the market supply is given by Q =…

A: A speculative situation in which only one corporation can sell goods and services to the general…

Q: Under patent protection, a firm has a monopoly in its production. Market demand is estimated to be P…

A: Hi, thank you for the question. As per our Honor code, we are allowed to attempt only first three…

Q: barriers to entry and public franchises are Patents are parriers to entry ) legal; legal D legal;…

A: Patents are Legal barriers to entry as O ly companies which has the patent can use that technology…

Q: Under patent protection, a firm has a monopoly in its production. Market demand is estimated to be P…

A: A market is a place where the buyers and sellers interact with each other and the exchange of goods…

Q: b. Suppose instead that the demand curve is actually nonlinear and all costs disappear (covered by a…

A: "Since you asked for part b, I am answering part b." Profit maximization condition: MR =MC

Q: 6. The production function of a firm, which operates as a monopoly in both the product and factors…

A: Click to see the answer

Q: Base your answer on the graph below, where a = 9.05 , b = 8.41, c = 4.02, d364 and e=2.6. Compared…

A: Marginal cost is the additional cost that is occurred in order to produce an additional unit of…

Q: 5) Let the demand of an industry be described by Q(P)= (a) Calculate the market output and priçe…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: True/False 1. In a principal-agent relationship between owner and manager with hidden e§ort, the…

A: SUMMARY- Economies of scale - lower average costs and therefore lower prices for shoppers. More…

Q: The cost function for producing ethanol from municipal waste (wastehol) is 1000+10q2where q is in…

A: Given The cost function for producing ethanol from municipal waste (wastehol) is 1000+10q2 where q…

Q: 6) Faced with 2 distinct functions Q1 =24- 0.2P1 ; Q2 = 10 – 0.05P2 & TC =35 + 40Q where Q= Q1 + Q2…

A: Given that; Q1 =24- 0.2P1 ; Q2 = 10 – 0.05P2 TC =35 + 40 Q where Q= Q1 + Q2

Q: Take an monopsony with an inverse demand of P = 20-.5Q equal to marginal revenue and inverse supply…

A: Answer - Need to find- Find the equilibrium price, quantity, all 3 surpluses, and any deadweight…

Q: For the next two questions, consider the impact of a 22% ad valorem tax imposed on the consumers in…

A: Ad-valorem tax is imposed on the value of the goods and services purchased by consumers, adding onto…

Q: The Key West Parrot Shop has a monopoly on the sale of parrot souvenir caps in Key West. The inverse…

A: It is required to ascertain that how many workers should be hired by the parrot shop each hour to…

Q: According to Brozen, which of the following groups benefitted from monopoly returns in the shipping…

A: Brozen has authored a book in which he has discussed in detail the groups that are benefitted from…

Q: Suppose Inverse market demand is given as P = 110 - 2Q. Market supply is given as Q = 10 + P. Also…

A: Answer: Given, Market demand: P= 110 - 2Q Market supply: Q = 10 + P or P = Q - 10 ATC = 0.25*Q (a).…

Q: (a) Explain why we might expect labor demand for a monopolist in the product market to be less…

A: A monopoly is a market structure where there is only one seller and many buyers. The seller has…

Q: Under patent protection, a firm has a monopoly in the production of a high-tech component. Market…

A: A monopoly firm is created due to the existence of barriers of entry in the market or industry and…

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

True/False 1. In a principal-agent relationship between owner and manager with hidden e§ort, the owner can design a wage scheme that insures the optimal Örst best e§ort by the manager regardless of the risk aversion of the manager. Justify your answer. 2. Consider a monopoly that faces an inverse demand curve and has a linear cost function. The monopoly would be indi§erent when maximizing proÖts between either choosing quantities or choosing prices. 3. A multiproduct Örm that as monopoly power over several products sets lower prices than separate Örms (each controlling a single product) when the products are substitutes or when there are economies of scope. 4. In the dominant Örm model (‡ la Hotelling) an increase in the marginal cost of the dominant Örm (with constant marginal costs) implies that proÖts necessarily decrease. 5. Suppose that an industry has 10 Örms where the market shares are ordered from the most to the least dominant Örm f0:5; 0:37; 0:05; 0:03; 0:02; 0:01;…

Polly’s Pet Store has a local monopoly on the grooming of dogs. The daily inverse demand curve for pet grooming isP = 20 - 0.1Qwhere P is the price of each grooming and Q is the number of groomings given each day. This implies that Polly’s marginal revenue isMR = 20 - 0.2QEach worker Polly hires can groom 20 dogs each day. What is Polly’s labor demand curve as a function of w, the daily wage that Polly takes as given?

Suppose that a monopoly firm finds that its MR is $50 for the first unit sold each day, $49 for the second unit sold each day, $48 for the third unit sold each day, and so on. Further suppose that the first worker hired produces 5 units per day, the second 4 units per day, the third 3 units per day, and so on. a. What is the firm’s MRP for each of the first five workers? b. Suppose that the monopolist is subjected to rate regulation and the regulator stipulates that it must charge exactly $40 per unit for all units sold. At that price, what is the firm’s MRP for each of the first five workers? c. If the daily wage paid to workers is $170 per day, how many workers will the unregulated monopoly demand? How many will the regulated monopoly demand? Looking at those figures, will the regulated or the unregulated monopoly demand more workers at that wage? d. If the daily wage paid to workers falls to $77 per day, how many workers will the unregulated monopoly demand? How many will the…

A pure monopsony buyer of a resource, in this case, labor L, has a marginal value curve for labor expressed as MV=140-0.4L Its total expenditure function is TE=20L+0.1L2 a) Suppose the firm acts as a monopsonist, What wage will it pay workers and how many hours of labor will the firm hire b) what is the value of deadweight loss given the firm is acting as a monopsonist?

(a) Explain why we might expect labor demand for a monopolist in the product market to be less elastic than labor demand under perfect competition ?

If Marginal Revenue (MR) is: d/dq = 2.050 - 18q - 4q2 a. Determine Revenue function b. Determine demand function

Table 14.13 shows information from the supply curve for labor for a monopsonist, that is, the wage rate required at each level of employment. What is the monopsonists marginal cost of labor at each level of employment? If each unit of labors marginal revenue product is 13, what is the firms profit maximizing level of employment and wage?

Asap Plz Suppose that a firm with market power can perfectly price-discriminate and faces the demand function q = 400- 4P. The firm's marginal costs are given by MC(q) = 2q +0.12q 2. If the firm cannot price-discriminate, the profit-maximizing level of output is 20.27, and the optimal price is $94.9325 Identify consumer surplus and producer surplus in the market when the firm cannot price discriminate, assuming that the firm maximizes profits. Calculate the deadweight loss from market power. Round your answers to two decimal places.consumer surplus: $______producer surplus: $________dead weight loss: $_____

Is Price Discrimination a case of monopoly only? If yes, then why and how? Why is it favorable to monopolists? And what are the reasons for this act? Can we consider dumping and prices discrimination the same? If yes then how, if not then why? Make a meaningful report to cover all the aspects of monopoly, price discrimination and dumping.

4, Name three definitional conditions of the market model termed pure monopoly. Explain their major implications for the behavior of the firm. Briefly for managerial economics class

Suppose we are studying the long-run competitive market for robots, the market demand for robots isgiven byD(p)=24p. All the firms are identical with the following cost curveC(y)=y22+8. a)What is the long-run competitive market equilibrium? Rick is a single consumer in the market; his consumption of robots is given byDi(p)=Mp, whereMis his fixed income. Rick is also a government regulator for the robot market; he decides if themarket is competitive or a monopoly.Morty is a firm in the market (he faces the same cost curve as everyone else:C(y)=y22+8). Mortywould like to operate as a monopolist (instead of a firm in a competitive market). b)How much would Morty have to pay/compensate Rick in order for Rick to allow Morty to operateas a monopolist (The market demand curve is the same as part a))? c)Suppose instead this was an oligopoly market with 2 firms engaged in Bertrand competition; bothfirms face the same cost curve and demand curve as part a). How much…