Question 5 Based on market research, a film production company (monopolistically competitive firm) in Ectenia obtains the following information about the demand and production costs of its new DVD: Demand: P = 1,000 - 10Q Total Revenue: TR = 1,000Q – 10Q2 Marginal Revenue: MR = 1,000 – 20Q Marginal Cost: MC= 100 + 10Q where Q indicates the number of copies sold and P is the price in Ectenian dollars. a. Find the price and quantity that maximize the company's profit. b. Find the price and quantity that would maximize social welfare. c. Calculate the deadweight loss from monopoly.
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- Aside from advertising, how can monopolistically competitive films increase demand for their products?Question#5Nile.com, the online bookseller, wants to increase its total revenue. One strategy is to offer a 10% discount on every book it sells. Nile.com knows that its customers can be divided into two distinct groups according to their likely responses to the discount. The accompanying table shows how the two groups respond to the discount. Group A Group B(sales per week) (sales per week) Volume of sales beforethe 10% discount 1.55 million 1.50 million Volume of sales afterthe 10% discount 1.65 million 1.70 million Using the midpoint method, calculate the price elasticities of demand for group A and group B.Explain how the discount will affect total revenue from each group.Suppose Nile.com knows which group each customer belongs to when he or she logs on and can choose whether or not to offer the 10% discount. If Nile.com wants to increase its total revenue, should discounts be offered to group A or to group B, to neither group, or to both groups?Here are the following questions. 8. The demand function for New Zealand kiwi fruit is Q- 50 -15P kiwi the fruit California fruit price/pound in cents, Al- cents, P fruit kiwi fruit advertising a. in thousands in millions of dollars, and Q quantity of of Q- curve for the P-50, P. 10 and 840-15P. NZklwiinits is: lb. Q. 50 -15P. Q- 120 -15P. d. Q -710 20 e, none of the above. 9. Given the inverse demand curve P 50- 01Q, the firm prices itself out of the market when: P $20. b, P $30. P $40. d. P $50. none of the above. 10. suppose that the quantity demanded of some candy bar is a function of the price/bar of the candy bar, P, the average price of all other candy bars, the candy bar size, and advertising, A. Q f(P, PA Z, A). The firm increases the bar size while none of the other explanatory variables change from their current levels. Therefore: a. this represents a move along the demand curve. b. this represents a shift of the entire demand curve. c at the new point on the demand curve,…
- The following graph shows the daily demand curve for bippitybops in Chicago. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. Total Revenue 0 8 16 24 32 40 48 56 64 72 80 200 180 160 140 120 100 80 60 40 20 0 PRICE (Dollars per bippitybop) QUANTITY (Bippitybops per day) Demand A B Area: 1280 Calculate the daily total revenue when the market price is $180, $160, $140, $120, $100, $80, $60, and $40 per bippitybop. Then, use the green point (triangle symbol) to plot the daily total revenue against quantity corresponding to these market prices on the following graph. Total Revenue 0 8 16 24 32 40 48 56 64 72 80 3840 3520 3200 2880 2560 2240 1920 1600 1280 960 640 320 0 TOTAL REVENUE (Dollars) QUANTITY (Bippitybops per day) According to the midpoints formula, the price elasticity of demand between points A and B on the initial graph is approximately . Suppose the…Nile.com, the online bookseller, wants to increase its total revenue. One strategy is to offer a 10% discount on every book it sells. Nile.com knows that its customers can be divided into two distinct groups according to their likely responses to the discount. The accompanying table shows how the two groups respond to the discount. Group A Group B(sales per week) (sales per week) Volume of sales beforethe 10% discount 1.55 million 1.50 million Volume of sales afterthe 10% discount 1.65 million 1.70 million A. Using the midpoint method, calculate the price elasticities of demand for group A and group B. B. Explain how the discount will affect total revenue from each group.C. Suppose Nile.com knows which group each customer belongs to when he or she logs on and can choose whether or not to offer the 10% discount. If Nile.com wants to increase its total revenue, should discounts be offered to group A or to group B, to neither group, or to both groups?Nile.com, the online bookseller, wants to increase its total revenue. One strategy is to offer a 10% discount on every book it sells. Nile.com knows that its customers can be divided into two distinct groups according to their likely responses to the discount. The accompanying table shows how the two groups respond to the discount. Group A Group B(sales per week) (sales per week) Volume of sales beforethe 10% discount 1.55 million 1.50 million Volume of sales afterthe 10% discount 1.65 million 1.70 million A. Using the midpoint method, calculate the price elasticities of demand for group A and group B. B. Explain how the discount will affect total revenue from each group. C. Suppose Nile.com knows which group each customer belongs to when he or she logs on and can choose whether or not to offer the 10% discount. If Nile.com wants to increase its total revenue, should discounts be offered to group A or to group B, to neither group, or to both groups?
- lesson business math : pls do in the piece paper with a4 paper Question 4: Given the demand function: ? = 200 − 2? − ?? + 0.1?2 Where P = 10, PA= 15 and Y = 100, find: a. The price elasticity of demand b. The cross-price elasticity of demand; substitute or complementary goods? c. The income elasticity of demand; inferior, normal, or superior goods? Unconstrained Optimization: Profit Maximization Question 5: A firm is a monopolistic producer of two goods G1 and G2. The prices are related to quantities Q1 and Q2 according to the demand functions. ?1 = 50 − ?1 ?2 = 95 − 3?2 If the total cost function is: ?? = ?12 + 3?1?2 + ?22 Find the values of Q1 and Q2 which maximize π and deduce the corresponding prices. Lagrange Multipliers Question 6: Use Lagrange multipliers to find the maximum value of: ? = 4?? Subject to the constraint: ? + 2? = 40 Definite Integration: Investment Flow Question 7: If the investment flow is: ?(?) = 9000√? Calculate: a. The capital formation from the end of…Point on Demand Curve: A B C D E F G H I Price (P): $40 $35 $30 $25 $20 $15 $10 $5 $0 Quantity Demanded (QD): 0 5 10 15 20 25 30 35 40 (a) Based on this demand schedule, set up a graph (using excel) showing this demand curve and another graph showing the corresponding total revenue curve (i.e., you need two separate graphs with quantity on the horizontal axis).Explain the type of pricing strategy that you as the manager of a company would implementfor Good X and Good Y with the following price elasticity of demand co efficients. Usediagrams to motivate your answer.a). Good X: 2.3 b). Good Y: 0.6
- 2. You are the Southeastern Michigan regional manager at Coca-Cola, responsible forproduction and pricing in the Metro Detroit area. Your primary competitor is Pepsi. The marketresearch team at Coca-Cola is thinking about launching a new product, Orange Vanilla Coke, toboost the brand. The cost function to produce a 12-pack of 12 fl. oz. cans of Orange VanillaCoke is C(qcoke) = 0.25qcoke and the market research team has estimated inverse market demandfor a 12-pack of this new “pop” in Southeastern Michigan to be P = 10.25 – 0.00025Q. a. Assuming Pepsi decides not to produce a similar product, allowing Coca-Cola to maintainmonopoly power in the market for orange vanilla cola, what price and quantity will youchoose to maximize profit? How much profit does Coca-Cola earn?b. What price and quantity you would choose to maximize profit if Pepsi spies discover yourproduct before launch, allowing Pepsi to produce and launch an identical product at the sametime. For your answer, assume the cost…Amazon.com, the online bookseller, wants to increase its total revenue. One strategy is to offer a 10% discount on every book it sells. Amazon.com knows that its customers can be divided into two distinct groups according to their likely responses to the discount. The accompanying table shows how the two groups respond to the discount. Group A (sales per week) Group B (sales per week) Vol. of sales before 10% discount 1.55M 1.50M Vol. of sales after 10% discount 1.65M 1.70M Using the midpoint method, calculate the price elasticities of demand for group A and group B. Explain how the discount will affect total revenue from each group. Suppose Amazon.com knows which group each customer belongs to when he logs on and can choose whether or not to offer the 10% discount. If Amazon.com wants to increase its total revenue, should discounts be offered to group A or to group B, to neither group, or to both groups?Germany is a major world supplier of cars. A recent earthquake severely damaged the production facilities of German car companies, sharply reducing the amount of chips they could produce. a. Assume that the total revenue of a typical non-German car manufacturer rises due to these events. In terms of an elasticity, what must be true for this to happen? Illustrate the change in total revenue with a diagram, indicating the price effect and the quantity effect of the German earthquake on this company’s total revenue.b. Now assume that the total revenue of a typical non-German car manufacturer falls due to these events. In terms of an elasticity, what must be true for this to happen? Illustrate the change in total revenue with a diagram, indicating the price effect and the quantity effect of the German earthquake on this company’s total revenue.