The demand function for Wally Winka's Neverending Lollipops is given by p- (10 - x)in(x+ 7) where p is the wholesale unit price in dollars and x is the quantity demanded each week, measured in units of a thousand. Compute the price, p, when x 5. Do not round your answer. Price, p Use implicit differentiation to compute the rate of change of demand with respect to price, p, when x-5. Do not round your answer. Rate of change of demand, x'- Compute the elasticity of demand when x 5. Do not round your answer. Elasticity of Demand-

The demand function for Wally Winka's Neverending Lollipops is given by p- (10 - x)in(x+ 7) where p is the wholesale unit price in dollars and x is the quantity demanded each week, measured in units of a thousand. Compute the price, p, when x 5. Do not round your answer. Price, p Use implicit differentiation to compute the rate of change of demand with respect to price, p, when x-5. Do not round your answer. Rate of change of demand, x'- Compute the elasticity of demand when x 5. Do not round your answer. Elasticity of Demand-

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

Chapter23: Price-searcher Markets With Low Entry Barriers

Section: Chapter Questions

Problem 7CQ

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Each year a new group of high school seniors chooses where they want to attend college. The college faces two identifiably different categories of customers, in-state and out-of-state students. The (inverse) demand equation for in-state students is given by PI=$9000- QI, while demand by out-of-state students is given by PO= $21,000 -9QO. P represents the annual tuition charged by the college and Q represents the number of students who enter as freshmen. The marginal cost of educating an additional student is constant and equal to $3000. Suppose that the Board of Trustees wants to act as a profit-maximizing monopolist in setting price and output. What tuition should they charge for in-state and out-of-state students, and how many of each would enroll each year?
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 before the 10% discount 1.55 million 1.50 million Volume of sales after the 10% discount 1.65 million 1.70 million Using the midpoint method, calculate the price elasticities of demand for group A and group B.
Annual demand and supply for the Entronics company is given by: QD = 5,000 + 0.5 I + 0.2 A - 100P, and QS = -5000 + 100P where Q is the quantity per year, P is price, I is income per household, and A is advertising expenditure. If A = $10,000 and I = $25,000, what is the demand curve? Given the demand curve in part a., what is equilibrium price and quantity? If consumer incomes increase to $30,000, what will be the impact on equilibrium price and quantity?
GameZone, a video games store, is considering the best way to price two new games – a first-person shooter (FPS) and a racing game. There are four types of consumers that might buy the games with roughly equal numbers of each type, and their willingness to pay (WTP) for each game is detailed in the table below (assume that the willingness-to-pay for a second game of the same type is zero). How should Gamezone price the two games separately to maximise revenue? How should Gamezone price a bundle of both games to maximise revenue? Is there an alternative (involving bundling) that generates more revenue than either single prices or a bundle alone? Under what condition/s is bundling likely to increase profits for a firm? Consumer Type WTP for FPS game WTP for racing game A $120 $70 B $70 $120 C $160 $10 D $10 $160
There are two types of consumers in Melbourne: students and non-students. The student population is 10, and each student’s demand of printing paper is Q=1−P, for P<1.The non-student population is 40, and each non-student’s demand of printing paper is Q=3−P, for P<3. Suppose OfficeMax is the only seller of printing paper in Melbourne. Assume zero production cost. Suppose OfficeMax cannot offer student discounts, and every customer has to pay the same price P. Derive the aggregate demand curve (for both students and non-students), and illustrate it in a diagram.
If price discrimination is the option to implement within the context of elasticity of demand, what pricing policy should be implemented in each market to raise total revenue?
1.) GM’s Food Shops has completed a study of weekly demand for its “new-fashioned” tacos in 53 regional markets. The study revealed that where Q is the number of tacos sold per store per week, A is the level of local advertising expenditure, Pop denotes the local population (in thousands), and Pr is the average taco price of local competitors. For the typical GM’s outlet, P = P1.50, A = P1,000, Pop = 40, and Pr = P1. Q = 400 - 1,200P + 0.8A + 55Pop + 800Pr Estimate the weekly sales for the typical GM’s outlet. Determine the equilibrium price and equilibrium quantity, if supply is Qs = 700 + 1,200P considering the general demand function of GM’s outlet Should GM raise its taco prices? Why or why not?
3. Pindyck & Rubinfeld, 8e. Ch. 11, #9. You are an executive for Super Computer, Inc. (SC), which rents out super computers. SC receives a fixed rental payment per time period in exchange for the right to unlimited computing at a rate of P cents per second. SC has two types of potential customers of equal number—10 businesses and 1 10 academic institutions. Each business customer has the demand function Q = 10−P, where Q is in millions of seconds per month; each academic institution has the demand Q = 8 − P. The marginal cost to SC of additional computing is 2 cents per second, regardless of volume. (a) Suppose you could separate business and academic customers. What rental fee and usage fee would you charge each group? What would be your profits? (b) Suppose you were unable to keep the two types of customers separate and charged a zero rental fee. What usage fee would maximize your profits? What would be your profits? (c) Suppose you set up one two-part tariff—that is, you set one…
Analyze the demand function for Toyotas in problem C4, page 82. Please also read “What is a Symbol” located in the folder with this assignment. This function is: QT = 200 -.01PT +.005PM -10PG +.01I +.003A Where: QT = quantity purchased PT = average price of Toyotas PM = average price of Mazdas PG = price of gasoline I = per capita income A = dollars spent annually on advertising Characterize this function by circling all in the following list that are applicable: univariate, bivariate, multivariate, linear, exponential, logarithmic, curvilinear, 1st degree, 3rd degree, additive, multiplicative, linearly homogeneous What is the numerical value of the partial derivative of the function with respect to the price of gasoline (PG) (be sure to also include the + or – sign. Note: I do not want the symbol for this partial derivative)? Write the mathematical symbol representing the coefficient of income (I) (the numerical…
Aidan and Celina are the only sellers of jack russell terrier (JRT) inAntigua. Celina chooses her profit maximizing number of JRTs to sell, q1, based on the number of JRT's that she expects Aidan to sell. Aidan knows how Celina will react and chooses the number of JRTs that she herself will sell, q2, aftertaking this information into account. The inverse demand function for JRTs isP(q1+ q2) = 2,000 - 2(q1 + q2). It costs $400 to raise a JRT to sell. (a)Explain in detail what type of competitors are Aidan and Celina. (b) If Celina expects Aidan to sell q2 JRTs, what will her own marginal revenue be if she herself sells q1 JRTs? (c) What is Celina's reaction function, R(q2)?(d) Now if Aidan sells q2 JRTs, what is the total number of JRT's that will be sold. (e) What will be the market price as a function of q2 only? (f) What is Aidan's marginal revenue as a function of q2 only? (g) How many JRTs will Aidan sell? (h) How many JRTs will Celina sell? (i)
Suppose that each person's demand for a project can be expressed as P = 100 - 20Q. Suppose that the firm wants to use two-part pricing. If the firm charges a price of $40 per unit, what is the maximum that the firm can charge in the fixed fee F?
There are two types of consumers in Melbourne: students and non-students. The student population is 10, and each student’s demand of printing paper is Q=1−?, for ?<1.The non-student population is 40, and each non-student’sdemand of printing paper is Q=3−?, for ?<3. Suppose OfficeMax is the only seller of printing paper in Melbourne. Assume zero production cost. Suppose OfficeMax offers a student discount, d, so students only pay d*p and non-students pay the full price, p. What are the profit maximizing price and discount d?