QUESTION 11The function that relates the inverse of speed (1/S) (i.e., the time in minutes that it takes totravel 1 mile) to traffic (T) on a highway is 1/S = 4 + 0.05T.Demand for traffic (measure as traffic volume per minute) on this road isT=6,880 -– 70.(1/S).a. Find the equilibrium traffic volume in the absence of any congestion tollI.b. Find the marginal cost function for traffic volume, where cost is expressed as travel timeper mile in minutes.c. Find the optimal level of traffic volume.d. Find the optimal congestion toll, expressed in minutes. (Imagine that the congestion tollconsists of sitting in the "penalty box" for this period of time.)

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Answered: QUESTION 11 The function that relates…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4: Estimating Demand

Section: Chapter Questions

Problem 6E

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The Gulf Sea Turtle Conservation Group (GSTCG), a non–profit group of volunteers working to collect data on nesting sea turtles and to promote sea turtle conservation, is considering creating a video to educate people about sea turtle conservation. The cost of duplicating a video on a DVD and mailing the DVD is $5.56. In a GSTCG member meeting, the video plan was discussed. The first two columns of Table 1 below shows the expected demand for the DVD at different suggested donation levels, and they can act as a single-price monopolist if they choose to. The receipts will be used to fund GSTCG supplies for their data collection and conservation work. At the end of each sea turtle nesting season, any excess funds are donated by the GSTCG to a local non-profit sea turtle research and rehabilitation facility. Complete Table 1 by computing the Total Revenue, Marginal Revenue, Total Cost, and Profit columns, each rounded to two decimal places. The cost of duplicating a video on a DVD and…
The question has three parts 1. Graph( attached as an image) 2. graph (attached as an image) 3.According to the midpoint method, the price elasticity of demand between points A and B is approximately.............................(0/0.6/1.67/75.02). Suppose the price of bikes is currently $200 per bike, shown as point A on the initial graph. Because the demand between points A and B is......................( elastic/inelastic/unit elastic), a $25-per-bike decrease in price will lead to............................(a decrease/an increase/no change) in total revenue per day. In general, in order for a price increase to cause a decrease in total revenue, demand must be......................( elastic/inelastic/unit elastic).
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