siness and Economics Revenue Suppose the demand function for q units of a certain item is 50 p = D(q) = 100 + q > 1, In q where p is in dollars. (a) Find the marginal revenue. (b) Approximate the revenue from one more unit when 8 units are sold. (c) How might a manager use the information from part (b)? 58. Profit If the cost function in dollars for q units of the item in Exercise 57 is C(q) = 100q + 100, find the following. (a) The marginal cost (b) The profit function P(g) (c) The approximate profit from one more unit when 8 units are sold (d) How might a manager use the information from part (c)? 59. Marginal Average Cost Suppose the cbst in dollars to make x oboe reeds is given by C(x) = 5 log, *+ 10. %3D Find the marginal average cost when the following numbers of reeds are sold. (a) 10 (b) 20

siness and Economics Revenue Suppose the demand function for q units of a certain item is 50 p = D(q) = 100 + q > 1, In q where p is in dollars. (a) Find the marginal revenue. (b) Approximate the revenue from one more unit when 8 units are sold. (c) How might a manager use the information from part (b)? 58. Profit If the cost function in dollars for q units of the item in Exercise 57 is C(q) = 100q + 100, find the following. (a) The marginal cost (b) The profit function P(g) (c) The approximate profit from one more unit when 8 units are sold (d) How might a manager use the information from part (c)? 59. Marginal Average Cost Suppose the cbst in dollars to make x oboe reeds is given by C(x) = 5 log, *+ 10. %3D Find the marginal average cost when the following numbers of reeds are sold. (a) 10 (b) 20

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter24: Price-searcher Markets With High Entry Barriers

Section: Chapter Questions

Problem 12CQ

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1. ThedemandfunctionforagoodisgivenbytheequationP=a−bQwhilethetotalcost function is TC = dQ2 + eQ + f, where a, b, d, e and f are positive constants. (a) Derive the equation for profit.(b) Derive an expression for the value of Q for which profit is maximised.
The monthly sales of Sunny Electronics' new sound system are given by q(t) = 2,000t − 50t2 units per month, t months after its introduction. The price Sunny charges is p(t) = 1,000 − t2 dollars per sound system, t months after introduction. Find the rate of change of monthly sales. HINT [See Example 4(a).] q'(t) = Find the rate of change of the price. p'(t) = Find the rate of change of monthly revenue 5 months after the introduction of the sound system. $ per month Interpret your answer. When t = , the revenue is increasing at a rate of $ per month.
Q=48+0.1p p=Price TC=820+10Q2 Q=Number of units Find the revenue maximizing price and output.
Please no written by hand solution A local KFC franchisee is evaluating the number of fried chickens to produce each day. The following table shows the 4 alternatives, the states of nature and their payoffs Daily Supply 40 50 60 70 Daily Demand 40 $80 $0 -$80 -$160 50 $80 $100 $20 -$60 60 $80 $100 $120 $40 70 $80 $100 $120 $140 What would your decision be if the following rules are applied? (show your calculation) Maximax Maximin La Place Minimax-regret
It costs $250 to produce an X-Box. We are trying todetermine the selling price for the X-Box. Prices between$200 and $400 are under consideration, with demand forprices of $200, $250, $350, and $400 given below. SupposeMSFT earns $10 in profit for each game that an X-Boxowner purchases. Determine the optimal price andassociated profit for the case in which an average X-Boxowner buys 10 games. Console Price ($) Demand200 2.00E06250 1.20E06350 6.00E05400 2.00E05Unit cost $250
Assume that there is only a single seller of papadums, and she knows eachbuyer’s willingness to pay. Assume that this seller incurs a cost of $4.00 perunit of papadum produced (i.e., the marginal cost is constant). If she intends to maximise profits, how many papadums would this seller supply to the market, and what price would she charge? Remember, the price has to be the same for each unit sold. Hint: start at a price of $17 and calculate what profit would be. Then lower the price just enough to attract an additional buyer and calculate what the new profit would be. Repeat this until all four buyers are purchasing the good and then check which price yields the highest profit. Alternatively, you can calculate the marginal revenue from lowering the price to attract an additional buyer and compare it to marginal cost.
Exercise 3.17 (competitive product market interac- tions). There is a mass 1 of identical entrepreneurs with the variable-investment technology described in Section 3.4. The representative entrepreneur has wealth A, is risk neutral, and is protected by limited liability. Denote the average investment by I and the indi- vidual investment i (in equilibrium i = I by symme- try but we need to distinguish the two in a ﬁrst step in order to compute the competitive equilibrium). A project produces Ri units of goods when successful and 0 when it fails. The probability of success is pH in the case of good behavior (the entrepreneur receives no private beneﬁt) and pL = pH − ∆p in the case of misbehavior (the entrepreneur then receives private beneﬁt Bi). Assume that it is optimal to induce the entrepreneur to behave. The market price of output is P = P(Q), with P' 0, where Q is aggregate production (with P(Q) tend- R ≡ RS…
A computer hardware firm sells both laptop computers and printers. Their pricing team determines that there are 3 types of customers with the following willingness to pay: Laptop Printer Customer Type A $800 $100 $900 Customer Type B $1,000 $50 $1050 Customer Type C $600 $150 $750 If the firm were to change only individual prices, what prices should it charge for its laptops and printers? Assume for simplicity that the firm has only 1 customer of each type and that incremental costs for laptops and printers = $0. How much profit does the firm earn? How much consumer surplus will there be?
Instructions: Answer ALL Questions. Include referencing where additional sourceshave been used. APA format is recommendedQuestion 1a. How is monopolistic competition like monopoly, perfect competition andoligopoly? b. Give two examples of price discrimination. In each case, explain why themonopolist chooses to follow this business strategy c. Why does price equal marginal revenue for the perfectly competitive firm?What is the relationship to the demand curve for the firm? Question 2a. Define economies of scale and explain why they might arise. Definediseconomies of scale and explain why they might arise.b. Explain the relationship between total product, marginal product, and averageproduct. c. How does fixed cost affect marginal cost? Why is this relationship important?Question 3a. Is it possible for total utility to increase while marginal utility diminishes?Explain. b. Mary has two dinner options available: eating a home cooked meal for $150 permeal, or at a restaurant for $260 per…
Let PX denote the price of product X (and likewise for other subscripts); M, the consumers’ income, and AX, the amount invested in advertising for product X (and likewise for other subscripts). If PY = 6; AZ = 50000; PW = 0.5, when graphing the demand function QDX = 3500 – 250PX – 280PY – 0.02AZ, what is the intercept of the Q-axis? Select one below. (A) 566.7667. (B)-13. (C) 820. (D)1050. 2. Imagine the market for Good X has a demand function of QDX = 40 – PX and a supply function of QSX = 2PX – 20. Suppose the current price of Good X (PX) is 30. Calculate consumer surplus (CS). CS = ________ 3. Imagine the tea market has a demand function of QDX = 10 – 2PX and a supply function of QSX = PX − 2, where PX is the price of the tea. Assuming the price is at equilibrium, calculate the equilibrium price (P*). P* = _________ 4. MacGuffins have a demand function of QD = 70 – P and a supply function of QS = 2P + 10. Determine the price at equilibrium PS = _______ 5.…
For problems 1 – 4: The Dolan Corporation, a maker of small engines, determines that in 2019 the demand curve for its product is P = 2,000 - 50Q where P is the price (in dollars) of an engine and Q is the number of engines sold per month. To sell 30 engines per month, what price would Dolan have to charge? A.4500 b.1000 c.500 d.450