increases deadweight loss lowers economic efficiency None of the other answers are correct. increases the quantity sold lowers economic efficiency and increases the quantit Previous
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- HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will allow HighFlyer Airlines to give passengers more comfort and sell more tickets at a higher price. However, redesigning the cabin means rethinking many other elements of the airplane as well, like engine and luggage placement, and the most efficient shape of the plane for moving through the air. HighFlyer Airlines has developed a list of possible methods to increase cabin space, along with estimates of how these approaches would affect the planes operating costs and ticket sales. Based on these estimates, Table 13.5 shows the value of R, how much should the firm invest in R on top of the private return; that is, an R private return to HighFlyer Airlines would have a 9 social return. How much investment is socially optimal at the 6 interest rate?b) Discuss and explain the concept of positive return toscale showing it relationship with the quantity ofproduction.cap-and-trade and windfall profitsA city called Seoul is suffering from high concentrations of mercury in the air, caused by burningcoal in power plants. There are two of these plants close to the city. The city’s mayor wants touse cap-and-trade to reduce emissions to a reportedly “safe” level of 60 tons. The two firms havethe following marginal benefits of emissions: MB1 = 100 – 2e1, MB2 = 25 – 0.5e2.a. How much mercury will each firm emit? What allowance price will prevail in themarket?Firm 2 hires a smart lobbyist who convinces the government that its profits are relatively low andthat it therefore deserves a generous allowance allocation. The government agrees and allocatesa1 = 20 allowances to firm 1 (for free) and a2 = 40 allowances to firm 2 (for free).b. What are the firms’ profits? Do any of the firms earn windfall profits? [Hint: compareprofits with and without regulation.] Windfall profits have been sharply criticized by consumer advocacy groups and politicians.c. What can…
- Four firms called Elm, Maple, Oak, and Cherry, produce wooden chairs. However, they also produce a great dealof garbage (a mixture of glue, varnish, sandpaper, and wood scraps). The first row of Table 12.6 shows the totalamount of garbage (in tons) that each firm currently produces. The other rows of the table show the cost of reducinggarbage produced by the first five tons, the second five tons, and so on. First, calculate the cost of requiring each firmto reduce the weight of its garbage by one-fourth. Now, imagine that the government issues marketable permits forthe current level of garbage, but the permits will shrink the weight of allowable garbage for each firm by one-fourth.What will be the result of this alternative approach to reducing pollution?(Figure: Electricity generation). What is the profit maximizing quantity produced? Group of answer choices 2700 GWh 0 GWh 3000 GWh 2000 GWhDefine the economic efficiency. Explain in detail.
- Explain the causes of food shortages that lead tostarvation.Externalities Mark owns a butchery. His marginal cost of selling meat is MC = 0.35Q, where Q is the pounds of meat he sells. Mark is in a competitive market and can sell all the meat he wishes for $7 per pound. However, the smell from the butchery bothers the customers of George, the owner of the coffee shop next door. Assume that every pound of meat costs George $1.4 worth of lost business. If Mark focuses on maximizing his profit, how much would he sell? At the profit-maximizing quantity from part a, does selling the last pound of meat benefit the society. Calculate the social marginal cost and compare it to the marginal benefit. Note that here “society” refers to Mark and George. What is the socially optimal quantity of meat sold?The concert promoters of a heavy metal band, WeR2Loud, know that there are two types of concert - goers: die - hard fans and casual fans. For a particular WeR2Loud concert, there are 1.000 die - hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50,000, which includes the cost of the band, lighting, security, etc. Refer to Scenario 15-6. How much additional profit can the concert promoters earn by charging each customer their willingness to pay relative to charging a flat price of $150 per ticket? Group of answer choices $25,000 $50,000 $ 75,000 $100,000
- Table 1Buyer Willingness To PayLori $50.00Audrey $30.00Zach $20.00Calvin $10.002. Refer to Table 1. If the price of the product is $15, then who would be willing to purchase theproduct?a. Lorib. Lori and Audreyc. Lori, Audrey, and Zachd. Lori, Audrey, Zach, and Calvin3. Refer to Table 1. If price of the product is $30, then the total consumer surplus isa. $-10.b. $-6.c. $20.d. $30.Qd = β0 +β1Psh +β2M+β3Pcg+β4Ax+ β5C Where, Qd = Quantity demand for a deluxe room in sh Psh = Price of a deluxe room in sh (US$/room) = US$. 200.00 M = Visitors per capita income (US$/Day) = US$ 120 Pcg = Price of a deluxe room in CG (US$/room) = US$. 150.00 Ax = Average advertising expenditure in sh (US$/room) US$. 18.00 C = Customer Satisfaction Index = 8.56 DV: Q R- Square: 0.86 T table value 1.671 No of obse: 62 F- Ratio: 154.15 Var Para Esti SE β0 127.8 49.6 β1 -1.3.0 0.42 β2 2.75 1.01 β3 2.55 1.21 β4 1.41 0.48 β5 1.85 0.23 a) Are estimated parameters comparable with economic theory? why ,What are the significant parameters that could be impact on the demand for a deluxe room b) Construct the Total Revenue (TR) function of Sh hotel and determine the TR maximize demand c) Calculate and interpret, cross-price elasticity, income elasticity, and advertising elasticity of demand for a deluxe room and Calculate Adjusted R2 and interpret it.. Profit The revenue from sales of x units of a productis given by R(x) = 200x - 0.01x2, and the cost ofproducing and selling the product can be describedby C(x) = 38x + 0.01x2 + 16,000.a. Producing and selling how many units will givemaximum profit?b. What is the maximum possible profit from producing and selling the product?
