Essentials of Economics
11th Edition
ISBN: 9781260520910
Author: SCHILLER, Bradley
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 5, Problem 6P
To determine
(a)
The total profits earned by the company when the price of the pair of jeans is $15 and output is 40 pairs.
To determine
(b)
The total profits earned by the company when the price of the pair of jeans is $15 and output is 50 pairs.
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Homework (Ch 05)
On the following graph, use the green point (triangle symbol) to plot the weekly total revenue when the market price is $50, $75, $100, $125, $150,
$175, and $200 per scooter.
TOTAL REVENUE (Dollars)
7830
7290
6750
8210
5670
5130
4590
4050
3510
2970
0 25 50 75 100 125 150 175 200 225 250 275 300 325
PRICE (Dollars per scooter)
Total Revenue
gage Learning
According to the midpoint method, the price elasticity of demand between points A and B is approximately
Suppose the price of scooters is currently $25 per scooter, shown as point B on the initial graph. Because the demand between points A and B is
a $25-per-scooter increase in price will lead to
in total revenue per week.
In general, in order for a price increase to cause a decrease in total revenue, demand must be
Suppose a retail seller of jeans currently has 40 customers. The retailer offers the following quantity
discount to these 40 customers. Buy the 1* pair of jeans at a price of $100, buy a 2d pair of jeans at a price
of $80, buy a 3d pair of jeans at a price of $60, and buy a 4th pair of jeans at a price of $40. Suppose the cost
to the retailer for each pair of jeans is $40. Suppose of these 40 customers, all buy the 1ª pair of jeans, 30
of these 40 buy a 2nd pair of jeans, 20 of these 30 (i.e., those who bought a 2nd pair) buy a 3d pair, and 10 of
the 20 (i.e., those who bought a 3rd pair) buy a 4t pair. The profit to the retailer from selling jeans to these
40 customers in this way equals:
[10]
A.
$4000
В.
С.
$4600
$6200
D.
None of the above
[11]
In the case of first degree price discrimination, each consumer is charged his/her reservation price.
А.
True
В.
False
Starting a gluten free and nut free restaurant has been a lifelong dream of Sydney Quintero, since he realized his dietary restrictions as a teenager. Now, that Sydney has
graduated with his business degree, he is pursuing his dream. He has researched geographic locations around his state and selected three different cities, Fort Alden,
Central City and Roseville, as possibilities for his flagship restaurant. The market for gluten/nut free products often changes due to health awareness, current trends and
general demographic changes in population. Sydney's marketing research has given him some estimates for the different locations as described in the decision table
below.
Alternatives
Fort Alden
Central City
Roseville
Answer
Decision Table
Strong Market
75,000
68,000
105,000
State of Nature
Fair Market
Step 1 of 2: Using the maximax strategy, where would Sydney decide to start his restaurant?
O Roseville
O Fort Alden
48,500
52,000
76,000
O Central City
Poor Market
25,000
27,000
30,000…
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