Three states have (separately) hired you as a consultant to advise them on their pricing of these license plates. They have given you the following information on the current prices (i.e., the extra fees) that they are charging and the estimated price elasticity of demand in each state for vanity plates at those prices: Price Elasticity State Colorado Illinois Price Charged $30 $60 Connecticut $50 Each state wants to maximize its revenue from the sale of the vanity plates. What general pricing advice (higher? lower? no change?) would you give to each state? Explain. -1.40 -0.80 -1.00

Three states have (separately) hired you as a consultant to advise them on their pricing of these license plates. They have given you the following information on the current prices (i.e., the extra fees) that they are charging and the estimated price elasticity of demand in each state for vanity plates at those prices: Price Elasticity State Colorado Illinois Price Charged $30 $60 Connecticut $50 Each state wants to maximize its revenue from the sale of the vanity plates. What general pricing advice (higher? lower? no change?) would you give to each state? Explain. -1.40 -0.80 -1.00

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 16CTQ: Would you rather have efficiency or variety? That is, one opportunity cost of the variety of...

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4. If Stopdecay does not change its price, the average monthly total revenue would be (Dropdown options: 240k, 195k, 200k, 162,500) 5. On the other hand, if it changes the price to sell the same number of units as it did before, the average monthly total revenue would be (Dropdown options: 231,920 or 241,440, or 160,000 or 172,480)
A firm is deciding between two different sewing machines. Technology A has fixed costs of $500 and marginal costs of $50 whereas Technology B has fixed costs of $250 and marginal costs of $100. If the price is $20 per unit, what is the break even amount of units for technology A? A firm is deciding between two different sewing machines. Technology A has fixed costs of $500 and marginal costs of $50 whereas Technology B has fixed costs of $250 and marginal costs of $100. If the price is $20 per unit, what is the break even amount of units for technology A? a. 70 b. 60 c. 50 d. None - They would have to shut down
Would you rather have efficiency or variety? That is, one opportunity cost of the variety of products we have is that each product costs more per unit than if there were only one kind of product of a given type, like shoes. Perhaps a better question is, What is the right amount of variety? Can there be too many varieties of shoes, for example?
2. Assume now that the costs of shipping are so large that Australian consumers can buy hand sanitizers from only one designated seller in Australia through both eBay and Amazon and there is no possibility of buying hand sanitizers in person in retail stores or any other online platforms. Explain with the help of a diagram whether this seller would be making a profit or a loss in the short run and in the long-run. Since it is one designated seller selling on two online market platforms (eBay and Amazon) would this be a monopoly or duopoly?
3.1) Chanelle’s chocolate factory has experienced financial difficulties. As a learned economics student, she has requested your aid to assist her in identifying various linear business functions. You have extracted the following co-ordinates and information for the month of May 2022: Please note that price is the x co-ordinate and quantity is the y co-ordinate. Total cost - A (3000;3) Variable cost – B (3000; 2) Total Revenue – C (12000; 4) Fixed cost = R2500 Using the following co-ordinates Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure
You and your rival must simultaneously decide what price to advertise in the weekly newspaper. If you each charge a low price, you each earn zero profits. If you each charge a high price, you each earn profits of GH¢3. If you charge different prices, the one charging the higher price loses GH¢5 and the one charging the lower price makes GH¢5.i. Find the equilibrium when there are no repeated transactions.ii. Now suppose there are repeated transactions. How would that change the results?
Assume that you are in the business of building houses in United Kingdom. You have analyzedthe market carefully, and you know that at a price of £120,000, you will sell 800 houses peryear. In addition, you know that at any price above £120,000, no one will buy your housesbecause the government provides equal-quality houses to anyone who wants one at £120,000.You also know that for every £20,000 you lower your price, you will be able to sell an additional200 units. For example, at a price of £100,000, you can sell 1,000 houses; at a price of £80,000,you can sell 1,200 houses; and so on.a. Sketch the demand curve that your firm faces.b. Sketch the effective marginal revenue curve that your firm faces.c. If the marginal cost of building a house is £100,000, how many will you build and whatprice will you charge? What if MC = £85,000?
6. Individual and market supply Suppose that Andrew and Beth are the only suppliers of ice cream cones in a particular market. The following table shows their monthly supply schedules: On the following graph, plot Andrew's supply of ice cream cones using the green points (triangle symbol). Next, plot Beth's supply of ice cream cones using the purple points (diamond symbol). Finally, plot the market supply of ice cream cones using the orange points (square symbol). Note: Line segments will automatically connect the points. Remember to plot from left to right.
Jim’s diner is just about to open in Memphis, Tennessee. However, Jim is trying to decide whether he wants to offer Coke or Pepsi soda products. He determines that, to offer either product, he will have to spend $1,800 in sunk costs to purchase and install the appropriate paraphernalia, e.g., a large Coca-Cola or Pepsi sign out front. Ultimately, he chooses to offer Coke products and agrees to pay Coke 5 cents per ounce of Coke sold for the right to use its product. After Jim makes the investments specific to his soda choice, Coke returns and asks for a fixed (one-time) fee in addition to the 5 cents per ounce. What is the most Jim should be willing to pay?
ABC Company is the manufacturer of a low-noise air-purification system. Its current capacity is 10,000 units/month, but ABC received orders totaling 9,000 units each month. Currently, ABC sells its system at a price of $200 per unit, its fixed cost is $500,000/month, and its variable cost is $100/unit. Note that currently, half of ABC’s variable cost is materials, and the other half is labor cost (wages for workers). ABC wants to consider cutting its price by 10% to stimulate demand. If ABC expands its capacity, it will have to lease additional manufacturing machines, each of which will cost $20,000/month to lease and can add 1000 units to ABC’s capacity. All existing workers are already working full-time. So, if ABC expands production, ABC has to either pay existing employees for overtime (1.5 times the regular wages) or hire new workers, who are expected to be paid 90% of the hourly wage of existing workers but produce only 75% of the hourly output of existing workers. (a) What is…
Phoenix Electricity is the only company providing electricity in City H. Suppose Phoenix Electricity relies heavily on natural gas but there is a drastic increase in the price of natural gas recently. How does this affect the output and price of Phoenix Electricity? Show the results with the aid of a diagram.(For the sake of simplicity, do NOT draw the AC curve in your answers.)
Explain why automobile manufacturers produce their own engines but purchase mirrors from independent suppliers.