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Discuss penetration Pricing model in a market economy
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- Consider the following scenario to answer the following questions: EJH Cinemas, a movie theater next to your university, attracts two types of customers—those who are associated with the university (students, faculty, and staff) and locals who live in the surrounding area. There are 10,000 university customers interested in purchasing movie tickets from EJH Cinemas, with a maximum willingness to pay of $7 per ticket. There are 20,000 local customers interested in purchasing tickets, with a maximum willingness to pay of $9 per ticket. The movie theater incurs a constant marginal cost of $4 per ticket. For simplicity, assume each customer purchases, at most, one ticket. #12. What will be the amount of EJH Cinemas’ total revenue if the price is $7 per ticket? a. $250,000 b. $210,000 c. $180,000 d. $140,000 e. $105,000 #13. What is the amount of consumer surplus if the price is $7 per ticket? a. $120,000 b. $90,000 c. $80,000 d. $40,000 e. $0 #14. What will be the amount of EJH Cinemas’…What is the Samuelson Rule? Why does the market outcome, based on the actions of rational, self-interested individuals will deviate from the results of the Samuelson Rulean example of a market where a Bertrand model would not be plausible
- To what extent do Tariffs maximize total utility for a given population?Explain how organizations can collude to raise prices of products like sugar using the concept of market forces.A supplier is selling tomatoes in two cities, Antalya and Istanbul. It costs him 1 TRY per kg of tomatoes delivered in each city. Let p1 be the price of a kg of tomatoes in Antalya and p2 be the price of a kg tomatoes in Istanbul. The price-response curves in each city: Antalya: d1(p1) = 500 - 100p1 Istanbul: d2(p2) = 1,200 - 200p2 Assuming the supplier can charge any price he likes, what prices should be charged for a kg of tomatoes in Antalya and Istanbul to maximize total contribution? What are the corresponding demands, revenues, and total contributions in each city? What is the total demand, total revenue, and total contribution over the two cities?
- In late 1991 two firms, Delta Airlines and the Trump Shuttle, provided air shuttle service between New York and Boston or Washington. The one-way price charged by both firms was $142 on weekdays and $92 on weekends, with lower off-peak advance purchase fares. In September 1991 Delta increased the per-trip shuttle mileage given to members of the Delta frequent-flier pro- gram from 1,000 to 2,000 miles, even though actual mileage from New York to either Boston or Washington is about 200 miles. Moreover, Delta also offered an extra 1,000 miles to frequent fliers who made a round-trip on the same day, raising a possible day’s total to 5,000 miles. Almost simultaneously, Trump changed the frequent-flier mileage it gave shuttle passengers. (It participated in the One Pass frequent-flier program with Continental Airlines and some foreign carriers.) What sorts of changes do you think Trump made? Whygive me correct answer with proper explanation A network effect, or network externality, exists when: Group of answer choices a firm ’ s average total cost rises continuously over the entire ran the customers of one business overlap with those of another competing business. the costs of resources for an industry rises as the number of sellers in an industry expands. the value of a product or service to each consumer increases as the number of users expands.Explain equilibrium. Be specific and provide at least one example.