Exercise A.9 You are an executive of Super Computer, INC. (SC), which rents supercomputers. SC receives a fixed rent for a period of time in exchange for the right to use unlimited computers equal to P cents per second. SC has two types of potential clients of equal numbers: 10 companies and 10 academic institutions. Each company has the demand function Q = 10 - P, where Q is expressed in millions of seconds per month; each academic institution has the demand Q = 8 - P. The marginal cost to SC of additional computer utilization is 2 cents per second, regardless of volume. a) Suppose you can distinguish companies from academic clients. What rental and usage fee would you charge each group? Calculate the profits you would get? b) Suppose that you cannot separate the two types of customers and that you did not charge a rental fee. What usage quota would maximize your profits? How many benefits

Exercise A.9 You are an executive of Super Computer, INC. (SC), which rents supercomputers. SC receives a fixed rent for a period of time in exchange for the right to use unlimited computers equal to P cents per second. SC has two types of potential clients of equal numbers: 10 companies and 10 academic institutions. Each company has the demand function Q = 10 - P, where Q is expressed in millions of seconds per month; each academic institution has the demand Q = 8 - P. The marginal cost to SC of additional computer utilization is 2 cents per second, regardless of volume. a) Suppose you can distinguish companies from academic clients. What rental and usage fee would you charge each group? Calculate the profits you would get? b) Suppose that you cannot separate the two types of customers and that you did not charge a rental fee. What usage quota would maximize your profits? How many benefits

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter6: Demand Relationships Among Goods

Section: Chapter Questions

Problem 6.4P

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You are the manager of Zokia Ghana Limited, a producer of beans. In Ghana, it is possible to produce beans or groundnut using the same resources. Therefore, producers are able to sw itch from beans to groundnut production depending on market conditions. Consequently, Zokia consulted an Economist who estimated the demand function for beans as: Qbd = 600 – 4Pb – 0.03M – 12Pg + 15T + 6Pe + 1.5N where Qbd is the quantity demanded of beans each month, ?? is the average price of beans (in Ghana Cedis), M is the average household income (in GH¢), ?? is the price of groundnut (in GH¢), T is a consumer taste index ranging in value from 0 to 10 (the highest rating), ?? is the price (in GH¢) consumers expect to pay next month for beans, and N is the number of buyers in the market for beans. Assume the following initial values: ??=5, ??= 40, T= 6.5, Pe= 5.25, N= 2000, Qbd = 2479 Using the concept of own price elasticity, advise management on price change in order to increase revenue.
You are the manager of Zokia Ghana Limited, a producer of beans. In Ghana, it is possible to produce beans or groundnut using the same resources. Therefore, producers are able to sw itch from beans to groundnut production depending on market conditions. Consequently, Zokia consulted an Economist who estimated the demand function for beans as: Qbd = 600 – 4Pb – 0.03M – 12Pg + 15T + 6Pe + 1.5N where Qbd is the quantity demanded of beans each month, ?? is the average price of beans (in Ghana Cedis), M is the average household income (in GH¢), ?? is the price of groundnut (in GH¢), T is a consumer taste index ranging in value from 0 to 10 (the highest rating), ?? is the price (in GH¢) consumers expect to pay next month for beans, and N is the number of buyers in the market for beans. Assume the following initial values: ??=5, ??= 40, T= 6.5, Pe= 5.25, N= 2000, Qbd = 2479 Explain to your Board of Directors why management should be worried about a rise in the price of groundnut.
You are the manager of Zokia Ghana Limited, a producer of beans. In Ghana, it is possible to produce beans or groundnut using the same resources. Therefore, producers are able to sw itch from beans to groundnut production depending on market conditions. Consequently, Zokia consulted an Economist who estimated the demand function for beans as: Qbd = 600 – 4Pb – 0.03M – 12Pg + 15T + 6Pe + 1.5N where Qbd is the quantity demanded of beans each month, ?? is the average price of beans (in Ghana Cedis), M is the average household income (in GH¢), ?? is the price of groundnut (in GH¢), T is a consumer taste index ranging in value from 0 to 10 (the highest rating), ?? is the price (in GH¢) consumers expect to pay next month for beans, and N is the number of buyers in the market for beans. Assume the following initial values: ??=5, ??= 40, T= 6.5, Pe= 5.25, N= 2000, Qbd = 2479 As a result of the effect of COVID-19 on the economy, the government has proposed an income cut policy. Labour unions…
You are the manager of Zokia Ghana Limited, a producer of beans. In Ghana, it is possible to produce beans or groundnut using the same resources. Therefore, producers are able to sw itch from beans to groundnut production depending on market conditions. Consequently, Zokia consulted an Economist who estimated the demand function for beans as: Qbd = 600 – 4Pb – 0.03M – 12Pg + 15T + 6Pe + 1.5N where Qbd is the quantity demanded of beans each month, ?? is the average price of beans (in Ghana Cedis), M is the average household income (in GH¢), ?? is the price of groundnut (in GH¢), T is a consumer taste index ranging in value from 0 to 10 (the highest rating), ?? is the price (in GH¢) consumers expect to pay next month for beans, and N is the number of buyers in the market for beans. Assume the following initial values: ??=5, ??= 40, T= 6.5, Pe= 5.25, N= 2000, Qbd = 2479 Determine the equation of the demand curve for beans
N=2 video broadcasting websites, You and Twi, must decide the number of minutes of ads to be displayed for every video that the user elects to watch. Let tY be the number of ad-minutes per video set by You, and tT the number of ad-minutes per video set by Twi. Streaming one video costs You cY=0.02, while it costs Twi cT=0.03. There are 100 million potential users, and each watches videos according to the following demand curves: qY((tY,tT) =10-2tY+tT=10-2tT+tY a- What is the cross-price elasticity between You and Twi? b- Suppose, for now, that You and Twi enter an (illegal) agreement by which they set tY=tT=t Derive the total number of users in the market as a function of t. Derive the profits for each website as a function of t. c- Now let the two platforms compete by each setting their number of ad-minutes: i. What is the best reply of You? What is the best reply of Twi? ii. Find the Nash Equilibrium of the game. iii. How many total users choose You and how many total users choose…
A consumer’s preferences over two goods x and y are given bythe utility function U(x, y) = xαyβ with α, β > 0. The prices of the goods are px = 2 and py = 4.The consumer has an income of I > 0.(a) For what values of α and β are these utility functions strictly monotone?(b) For what values of α and β will the consumer demand (i.e., Walrasian demand) be more x than y?(c) For what values of α and β are these goods gross substitutes? For what values of α and β are these goods gross complements? Provide a justification for your answer.
Nathan and Joe are shopping for video games. The demand function of George for Track and field games is Q = 40 - 4P, and Georgia’s demand function is Q = 36 - 3P. What will their combined demand be if the price is $2? $10? If we add George and Georgia’s demand functions, we get: At $2 a game, both George and Georgia’s will have positive demand for field games, and so we can use the combined equation to getAt $10 a game, however, George’s demand function gives negative demand, which we know means he just has 0 demand for field games. In this case, we ignore George's function, and just use Georgia’s to figure out their combined demand, since using the combined function would give the wrong answer.
1. Given the demand function for beef is Qx= 300-10 0Px+60Pp+0.01Y, where Qx is the tons of beef demanded in your city per week, Px is the pric e per pound of beef, Pp is the price per pound of pork, and Y is the average household income in t he city. The supply of beef function is Qx= 200+150P-30C, where Qx is the tons of beef supplied in your city per week, Px is the price of beef per pound, and C is the cost of feed for cows. Assume initially, the price of pork (Pp) is $3 per pound, Y=$50,000, and C=$5. a. Find the demand function Qd the given price of p ork (Pp) and income (Y) and find the supply function at the given cost of feed per pound (C). b. What is the equilibrium price per pound and quan tity demanded of beef? c. What is price elasticity of demand for beef? Is the demand for beef price elastic d. As the manager of the beef business, should incr ease or decrease the price of beef if objective is to increase your operating revenue? e. What is the cross-price elasticity…
Considering, QDx = - 4Px -0.02R + 2Pz, and assuming that the individual's income (R) is equal to $600, and the price of the good z (Pz) equals $10, if the individual's income (R) reduce to $300, will the individual's demand for good x increase or decrease? CALCULATE and GRAPHICALLY ILLUSTRATE the behavior of demand for good x. Then inform what kind of property this is.
only typed answer Q1 Assume that the demand curve D(p) given below is the market demand for widgets: Q=D(p)=1291−14pQ=D(p)=1291-14p, p > 0 Let the market supply of widgets be given by: Q=S(p)=−5+10pQ=S(p)=-5+10p, p > 0 where p is the price and Q is the quantity. The functions D(p) and S(p) give the number of widgets demanded and supplied at a given price. What is the equilibrium price? Please round your answer to the nearest hundredth. What is the equilibrium quantity? Please round your answer to the nearest integer. What is the total revenue at equilibrium? Please round your answer to the nearest integer.
Kids in the city were willing and able to buy 12 rolls of cotton candy when the price was $1.00 each and 2 rolls of cotton candy when the price was $3.00 each. However, cotton candy machine owners in the city are willing to make 2 cotton candy rolls when the price was$1.00 and 12 cotton candy rolls when the price is $3.00 ii) Assuming that the market is linear, showing all working Derive the demand curve Pd(Q) for cotton candy in the term of price, where x= quantity Derive the supply curve Ps(Q) for cotton candy in term of price, where x = quantity iii) Using your answer from part (ii), Determine the equilibrium price and quantity for cotton candy in the city
4) An economic consultant for MCM corporation recently provided the firm’s marketing manager with this estimate of the demand function for the firm’s product: Qxd = 12,000 − 3Px + 4Py − 1M + 2Ax where Qxd represents the amount consumed of good X, Px is the price of good X, Py is the price of good Y, M is income, and Ax represents the amount of advertising spent on good X. Suppose good X sells for K200 per unit, good Y sells for K15 per unit, the company utilizes 2,000 units of advertising, and consumer income is K10,000. 4 (i) How much of good X do consumers purchase? 4 (ii) Are goods X and Y substitutes or complements? 4 (iii) Is good X a normal or an inferior good?