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?

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?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 4SQ

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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.
Bluth’s Bananas is considering expanding its retail operations for its one-of-a-kind frozen banana stands on Jones Beach, which is 10 kilometers long. Bluth’s Bananas estimates that the typical day has 2,000 visitors to the beach, spread uniformly, and that each will demand a single frozen banana provided the price plus any disutility of traveling to a stand does not exceed $6. To visit a stand a beach goer incurs a disutility of $0.50 for each 1/4 kilometer they have to walk to reach a stand. Each Bluth Banana costs $0.75 to make and each stand requires an operating fee to be paid to the city of $50 per day. Determine the equilibrium number of stands Bluth’s Bananas should operate on the beach given it is not in competition with any other firm. Determine the profit maximizing price for the bananas and calculate the profit realized by BB in equilibrium.
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 offers a student discount, $1, so students only pay $0.50 and non-students pay the full price, $1.50. What is the deadweight loss in this situation? What is the deadweight loss if there was no discount and both students and non-students share an optimal price of $1.30?
Upon graduating from UT this May, you take on a management position working at UtMax theater. You will consider the utility of seeing performance over 1 month, and suppose that at a regular price of $$$ per ticket (my assigned ticket price is 145), customers will see no performance, however with the price reduced by $5, customers will see one performance per month and when reduced by $10, customers will see two performances. As long as the number performances, x, is small, your demand function for performance can be modeled by p=D(x). Write down your demand function.
There are two types of consumers for ice cream. The first type likes ice cream and the inverse demand is given by P = 5 - Q/2 . The second type is crazy about ice cream and theinverse demand is given by P = 20 - Q/2. There are 10 people from each type. Find the market demand.
Seven years ago, you started a cross-town delivery service. You have two types of deliveryservices. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10lbs. Initially, you charged the same price for each service, but since the beginning of the Covid19 pandemic you have seen an increased in the demand for your package service. The demand for the package services seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel and package service or should you segment the market and charge two different prices? Complete the tables below and determine the best price strategy: price the services differently in each segment; or continue the one price policy? The Parcels Market Price Parcels TR MR TC MC MR-MC…
Seven years ago, you started a cross-town delivery service. You have two types of deliveryservices. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10lbs. Initially, you charged the same price for each service, but since the beginning of the Covid19 pandemic you have seen an increased in the demand for your package service. The demand for the package services seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel and package service or should you segment the market and charge two different prices? Complete the tables below and determine the best price strategy: price the services differently in each segment; or continue the one price policy? The Packages Market Price Packages TR MR TC MC…
Seven years ago, you started a cross-town delivery service. You have two types of deliveryservices. You have a small parcel service for anything that is flat and measures less than 11x17. You have a package service using a 100 lb capacity bike trailer for anything weighting up to 10lbs. Initially, you charged the same price for each service, but since the beginning of the Covid19 pandemic you have seen an increased in the demand for your package service. The demand for the package services seems to be more inelastic than the demand for parcels. You are now wondering if you should charge different prices for the parcel and package service or should you segment the market and charge two different prices? Complete the tables below and determine the best price strategy: price the services differently in each segment; or continue the one price policy? Combined Parcels & PackagesPrice Parcels and Packages TR MR TC MC MR-MC…
You are the manager of a golf course. For simplicity assume that you only have two potential customers – a high demand customer whose inverse demand for golf services is given by P = 10 – 0.5Q and a low demand customer whose inverse demand for golf services is given by P = 8 – 0.5Q. Suppose the marginal cost to the golf course of each round of golf is zero.Suppose you have to charge both players the same two-part pricing strategy. Which of the following pricing strategies will yield the highest profit for you? A. Charge a fixed fee of €100 and a per unit fee of zero B. Charge a fixed fee of €64 and a per unit fee of zero C. Charge a fixed fee of €64 and a per unit fee of €4 D. Charge a fixed fee of €128 and a fixed fee of zero.
A firm sells two goods (X and Y) that are related in consumption. The estimated demand and cost conditions are: PX = 20 − 0.1QX − 0.05QY PY = 70 − 0.3QY − 0.1QX MCX = 1 + 0.1QX MCY = 2 + 0.25QY What are the profit-maximizing prices for the two goods? Multiple Choice PX = $25.60, PY = $20.50 PX = $30, PY = $35 PX = $50, PY = $45 PX = $11.20, PY = $42.70
Nathan and Joe are shopping for video games. The demand function of George for Track and field games is Q = 40 - 4P, and Georgia’s demand function is Q = 36 - 3P. What will their combined demand be if the price is $2? $10? If we add George and Georgia’s demand functions, we get: At $2 a game, both George and Georgia’s will have positive demand for field games, and so we can use the combined equation to getAt $10 a game, however, George’s demand function gives negative demand, which we know means he just has 0 demand for field games. In this case, we ignore George's function, and just use Georgia’s to figure out their combined demand, since using the combined function would give the wrong answer.
From California to New York, legislative bodies across the United States are considering eliminating or reducing the surcharges that banks impose on noncustomers, who make $14 million in withdrawals from other banks’ ATM machines. On average, noncustomers earn a wage of $20 per hour and pay ATM fees of $2.75 per transaction. It is estimated that banks would be willing to maintain services for 5 million transactions at $1.00 per transaction, while noncustomers would attempt to conduct 19 million transactions at that price. Estimates suggest that, for every 1 million gap between the desired and available transactions, a typical consumer will have to spend an extra minute traveling to another machine to withdraw cash.a. Based on this information, what would be the nonpecuniary cost of legislation that would place a $1.00 cap on the fees banks can charge for noncustomer transactions?b. What would be the full economic price of this legislation?