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- Yummy Yummy Popcorn, Inc. sells bags of flavored popcorn in a popular mall. As shop owner and operator, you have observed that weekly popcorn sales are well-described by the demand equation: Q = 1,200 - 800P + 2.0A, where A denotes advertising weekly spending (in dollars). You are currently charging $1.50 per bag of popcorn (for which the marginal cost is $.75) and spending $500 per week on advertising. b) Check whether your current $1.50 price is profit maximizing. If not, determine the store’s optimal quantity and price. c) Should the store consider increasing its advertising spending? Why or why not. Please do fast ASAP fastConsider any market that has a demand curve given by: Qd = 125 - 0.4P. Being the total quantity demanded in the market, given the quantity in millions of units and the market price, calculated in monetary units. Imagine that there are 2 Cournot oligopolists operating in this market that have Cmg = CVme = 2. About this market, the question is: a) What is the reaction curvature of the oligopolists? b) What will be the production of each of the companies? c) What is the sale price for oligopolists?A night-club owner has both graduate student and professor customers. The demand for drinks by a typical graduate student is QS=18-2P. The demand for drinks by a typical professor is QA=12-P. There are equal numbers of each. The marginal cost of each drink is $2. Assume no Sxed costs. If the owner can “card” patrons and determine who is a graduate student or professor and, in turn, can serve each group by offering a cover charge and a number of drink tokens to each group, which allows them to purchase drinks at marginal cost, what will the cover charge be for graduate students? Professors? What is the profit of the club owner under the token and cover charge pricing (same profit assumption as before)?
- A monopoly is considering selling several units of a homogeneous product as a single package. A typical consumer’s demand for the product is Qd = 50 - 0.25P, and the marginal cost of production is $120. Determine the optimal number of units to put in a package. How much should the firm charge for this package?A monopoly is considering selling several units of a homogeneous product as a single package. A typical consumer’s demand for the product is Qd = 70 - 0.25P, and the marginal cost of production is $100.a. Determine the optimal number of units to put in a package. unitsb. How much should the firm charge for this package?$The final output for a product is comprised of one unit of input from both a wholesaler and a retailer. There is only one wholesaler but there are two retailers. The wholesaler has marginal cost of c=10. The retailers have marginal costs of 0. Final demand is given by P = a – bQ, where a=100 and b=3. The wholesaler can set a two-part tariff, with a fixed-fee F and a per unit fee w. b) Now assume that the retailers are Cournot competitors. Again the wholesaler sets a fixed-fee and a per-unit charge. What is the output level of the retailers,given that the wholesaler has set a per-unit charge of w? What is the maximum fixed fee F that the retailers would be willing to pay?
- he Pear Computer Company just developed a totally revolutionary new personal computer. Pear estimates that it will take competitors at least two years to produce equivalent products. The demand function for the computer is estimated to be P=2,500−500Q�=2,500−500� where Q� is millions of computers. The marginal (and average variable) cost of producing the computer is $900. Assuming Pear acts as a monopolist in its market, the profit-maximizing price and output levels are per computer and million computers, respectively. The total contribution to profits and fixed costs at this output level is million. Pear Computer is considering an alternative pricing strategy of price skimming. It plans to set the following schedule of prices over the coming two years: Complete the following table by calculating the contribution to profit and overhead for each of the 10 time periods and prices. Time Period Price Quantity Sold Total Contribution ($) (Million)…A decorator, who is a monopolist, makes two types of specialty picture frames. From experience, the decorator has determined that if x frames of the first type and y frames of the second type are made and put on sale in a showroom, they can be sold for (100 - 2x) dollars and (120 - 3y) dollars each, respectively. The total cost of constructing these frames is (12x + 12y + 4xy) dollars. How many frames of each type should be produced to realize the maximum profit. and what is the maximum profit? Make sure to verify that this is indeed a maximum.Suppose that demand for a particular style of handmade Rwandan baskets is Qd = 1700 – 10P. Each basket maker has the following cost function: TCi = 1000 + 50 qi + .1 qi^2. Given this information, find the market outcomes under the various market structures below Multiplant monopoly. Suppose that a local entrepreneur decides to form a single monopoly by acquiring all the firms from part b and operating them as a single company (Each basket maker will still produce using the same cost function, but all the output will be marketed centrally). Now, how much output is produced at each plant (that is, by each basket maker), and how much by the firm as a whole? What is the monopoly price? What is the monopolist’s profit or loss per plant? What is the firm’s overall profit or loss for all 10 plants together? What is MCi and ATCi? What is MR?
- A monopoly has the demand schedule p = 210 − 0.2q and the marginal cost schedule MC = 20 + 0.8q (a) If it can practise first-degree price discrimination how much should it sell? (b) If it can practise second-degree price discrimination and it has already made the decision to sell the first 100 units at a price of £190, what price should it charge for the rest of the units it sells?Qno3 AVAC is the only pharmaceutical firm producing a Vaccine. The Demand Curve for its product is Qd = 250 – 50 P where P is Price and Q are packs of vaccines in ‘000 Total Cost Function estimated by the firm is TC = 15 + 0.5Q where Q is monthly output. Required. a). What is the market structure of AVAC? State its characteristics. b). To maximize profit, i) What will be the optimum price and how many packs of Vaccine should the firm produce and sell per month? ii). If this number of packs is produced and sold, what will be the firm’s monthly profit? c). Using available information, draw AVAC’s demand, marginal revenue and marginal cost curves in a graph and clearly label thefirm’s profit maximizing price, quantity and profit. Do you observe any welfare loss? If so, also indicate and label the area on the graph.? d). Assume all other pharmaceutical firms in the market start producing the Vaccine and the market becomes competitive. What will…AVAC is the only pharmaceutical firm producing a Vaccine. The Demand Curve for its product is Qd = 250 – 50 P where P is Price and Q are packs of vaccines in ‘000 Total Cost Function estimated by the firm is TC = 15 + 0.5Q where Q is monthly output. What is the market structure of AVAC? State its characteristics. To maximize profit, What will be the optimum price and how many packs of Vaccine should the firm produce and sell per month? If this number of packs is produced and sold, what will be the firm’s monthly profit? Using available information, draw AVAC’s demand, marginal revenue and marginal cost curves in a graph and clearly label thefirm’s profit maximizing price, quantity and profit. Do you observe any welfare loss? If so, also indicate and label the area on the graph. Assume all other pharmaceutical firms in the market start producing the Vaccine and the market becomes competitive. What will be the impact on…
