When there are low barriers to entry in a now profitable market, there may be a flood of alternative suppliers. This will cause a shift in the demand curve and price. Group of answer choices left, higher left, lower right, lower right, higher the
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- At a student café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price discriminate).Students with Early Classes Students without Early ClassesCoffee $0.70 $0.60Banana $0.50 $1.00The marginal cost of coffee is $0.10. The marginal cost of a banana is $0.40. Is bundling more profitable than selling separately? If so, what price should be charged for the bundle?Suppose an airline sells air tickets to two types of customer – business travelersand vacation travelers. Their estimated demand elasticities are -2.5 and -4.0respectively.Suppose the marginal cost is constant at $240, and the services provided to thetwo types of customer are similar. Calculate the fares the airline should charge on the air tickets sold to therespective types of customers. Show your calculations.Multichoice company broadcasts to subscribers in Lusaka and Solwezi. The demand for each ofthese two groups are Qsz= 50 - (1/3) Ps and QUSK= 80 - (2/3) Pusk, where Q is in thousands ofsubscriptions per year and P is the subscription price per year. The cost of providing Q units.ofservice is given by C (Q) = 1000 + 30Q, where Q = Qsz + QusK. Assuming Multichoice is aMonopoly and can engage in third-price discrimination, then1. What is the profit-maximizing price and quantity in Solwezi Market?2. What is the profit-maximizing price and quantity in Lusaka Market?3. Suppose the Monopoly can only charge a single. What price should it charge and what isthe total quantity sold?
- Explain the methods used toallocate the integratedmarketing communications(IMC) budget.There is a monopolist, Concrete Mex, in the concrete market in Mexico. The demand function is Qd= 100-50p. The marginal cost of production is c = 0.4. a) ConcreteMex claimed the high price is due to high transportation costs and persuaded the government to help cut down the costs. As a result, for every unit of concrete sold, the government subsidizes ConcreteMex 0.2 dollars. What are the new profit maximizing price and production level for ConcreteMex? b) Under the subsidy policy and the new price in a part, calculate the consumer surplus, producer surplus, and deadweight loss. You do not need to consider government spending for the deadweight loss. c) Suppose ConcreteMex wants to enter a different market, the competitive market in Texas. To enter the market, ConcreteMex needs to pay a fixed cost of F = 1, and its variable cost in Texas is VC = (0.4+Q)Q. What is ConcreteMex’s total cost, marginal cost, and average total cost in Texas at production level Q?Suppose a museum charges different entrancefees for children, students, adults, and seniors, butthese groups all pay the same amount for souvenirs at the gift shop. Explain why the museum pricediscriminates on admission but not souvenirs.
- Suppose that a well-known scientific fiction writer finishes a new book. The writer’s publisherfinds the demand curve for this new book is given by Q = 4200 − 200P, where P is its price. It will cost $2000 to set the book in type. This setup cost is necessary before any copies can be printed. In addition to the setup cost, there is a marginal cost of $8 per book for every book printed. Assume that the publisher wants to maximize the profit from this new book, and considers them-selves as a monopoly.(a) Write down the total revenue (TR(Q)), as a function of the quantity (Q).(b) Write down the total cost (TC(Q)), as a function of the quantity (Q)Suppose that a well-known scientific fiction writer finishes a new book. The writer’s publisherfinds the demand curve for this new book is given by Q = 4200 − 200P, where P is its price. It will cost $2000 to set the book in type. This setup cost is necessary before any copies can be printed. In addition to the setup cost, there is a marginal cost of $8 per book for every book printed. Assume that the publisher wants to maximize the profit from this new book, and considers them-selves as a monopoly.(a) Write down the total revenue (T R(Q)), as a function of the quantity (Q).(b) Write down the total cost (T C(Q)), as a function of the quantity (Q).(c) Find the profit-maximizing quantity (Q∗).(d) Find the profit-maximizing price (P ∗).(e) What is the profit? Please just help with c,d,eA social cost is applied to the monopolist market structure. Why does thisoccur? If the gains producers achieve from being a monopolist are provided toconsumers, would the social cost of the monopolist be eliminated?
- Amy Bob and Carry have the following reservation prices for goods X and Y Good X Good Y Amy 120 5 Bob 80 80 Carry 15 110 What are the optimal prices for Goods X and Y when they are sold separately? What is the profit with bure bundling costless production? Would mixed bundling improve upon pure bundling?There is a monopolist,ConcreteMex,in the concretemarketin Mexico. The demand function is QD= 100–50p. The marginal cost of production isc=0.4. (referencing) Question 1.3 ConcreteMex claimed the high price is due to high transportation costs and persuaded the government to help cut down the costs. As a result, for every unit of concrete sold, the government subsidizes ConcreteMex 0.2dollars. What are the new profit-maximizing price and production levels for ConcreteMex? Under the subsidy policy and the new price in Question 1.3, calculate the consumer surplus, producer surplus, and deadweight loss. You do not need to consider government spending for the deadweight loss.Suppose an airline sells air tickets to two types of customer – business travelersand vacation travelers. Their estimated demand elasticities are -2.5 and -4.0respectively.Suppose the marginal cost is constant at $240, and the services provided to thetwo types of customer are similar.a. Based on the given information, explain with TWO practical reasons whether theairline should charge a higher price on business travelers or vocational travelers.Explain without calculation.
