3. Ariana Grande has just finished recording her latest CD. Her record company's marketing department determines that the demand for the CD is as follows: Price $24 22 Number of CDs 10,000 20,000 30,000 40,000 50,000 60,000 The company can produce the CD with no fixed cost and a variable cost of $5 per CD. a. Find total revenue for quantity equal to $10,000, $20,000, and so on. What is the marginal revenue for each $10,000 increase in the quantity sold? b. What quantity of CDs would maximize profit? What would the price be? What would the profit be? c. If you were Ariana's agent, what recording fee would you advise her to demand from the record company? Why? 20 18 16 14
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- City-wide lockdowns were implemented in Sydney by the NSW government in July-August 2021 in response to new COVID-19 cases detected in the community. Assume that builder XYZ is a monopoly in Sydney’s Southwest, who specialises in apartment construction.(a) Draw a diagram to illustrate XYZ making economic profits before the implementation of the hard lockdown in Sydney’s Southwest. On your diagram clearly indicate the quantity XYZ is choosing to produce and the price XYZ is choosing to charge.(b) Assuming costs remain constant and that that the construction industry is still allowed to operate normally, explain the impact of Sydney’s lockdown on builder XYZ’s demand from Q2 part (a). With the aid of a new diagram, discuss XYZ’s static profit or loss situation after these changes. Clearly indicate the quantity XYZ is choosing to produce and the price XYZ is choosing to charge. (c) Assume that XYZ survives the lockdown and stays in business. If the NSW government decides to double the…Question#5Nile.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 beforethe 10% discount 1.55 million 1.50 million Volume of sales afterthe 10% discount 1.65 million 1.70 million Using the midpoint method, calculate the price elasticities of demand for group A and group B.Explain how the discount will affect total revenue from each group.Suppose Nile.com knows which group each customer belongs to when he or she logs on and can choose whether or not to offer the 10% discount. If Nile.com wants to increase its total revenue, should discounts be offered to group A or to group B, to neither group, or to both groups?A recent survey shows that the shunning of French products has bought about 35 percent decrease in the sales within a month. Suppose, in September 2020, the market for Garnier hair color a French product was at equilibrium with an equilibrium price 1050 and equilibrium quantity of 12,000. Analyze the impact of a prohibition on the demand of Garnier hair color for the month of October 2020 and illustrate it graphically. Also, explain why or why not the demand has changed?
- Home work CH 6.34 In 2005 Uber and Lyft had not entered the market yet and the New York City taxi cab commission could set prices and restrict entry into the market for taxi cab rides. New York City taxi cabs provided a quantity of 100 rides in 2005. For simplicity, suppose every taxi cab ride was identical. Each ride lasted 10 miles and the price of each ride was $50. At this price, the price elasticity of demand was -5.0. Taxi drivers in this market faced two costs. First was the cost of purchasing a yellow Ford Crown Vic taxi cab. Second was the cost of gasoline, which was $2 per gallon at the time. The Ford Crown Vic could travel 20 miles for each gallon of gasoline. If the New York City taxi cab commission's objective were to maximize economic profits, what price should they charge for each ride? (Hint, first find the demand curve.)Suppose the demand and the supply for lumber (harvested wood processed in a sawmill) used for construction in Australia are given byQD =100 – 2PQS = 1/2PAssume also that the market is perfectly competitive. 7. Steel is a substitute for lumber in construction. Now suppose the price for steel rises. Use a graph of supply and demand to show what happens in equilibrium. Show changes relative to the original equilibrium you found. 8. back to the orginial graph once more, the government introduces a subsidy of s=5 per unit of lumber transacted in the market. Calculate the new equilibrium quantity and the price paid by consumers and received by producers.9. Given the subsidy in 8, calculate and illustrate in a graph the consumer surplus, producer surplus and subsidy expenditure.10. Calculate the deadweight loss caused by the subsidy in 8 and illustrate it in a graph. 11. Who benefits more from the subsidy, consumers or producers? Why?a) Suppose a movie theater determines that the elasticity of demand for movie tickets is -2.0 for senior citizens and –1.5 for adults under age 65, and the marginal cost is $2 per consumer. Use the Lerner index to determine how much senior citizens should be charged and how much adults under age 65 should be charged. b) A different movie theater, which faces the same marginal costs, charges consumers $6 for matinee movies and $10 for evening movies. Use the Lerner Index to calculate the price elasticity of demand for matinee consumers and evening consumers.
- Hi, could you help my resolve thi homework? Q1) Bookshelf.com, the online bookseller, wants to increase its total revenue. One strategy is to offer a 10% discount on every book it sells. Bookshelf.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 (sales per week) Group B (sales per week) Volume of sales before the 20% discount 3.1 million 3.0 million Volume of sales after the 20% discount 3.3 million 3.4 million Calculate the price elasticities of demand for group A and group B. Explain how the discount will affect total revenue from each group. Suppose Bookshelf.com knows which group each customer belongs to when he logs on and can choose whether or not to offer the 10% discount. If Bookshelf.com wants to increase its total revenue, should discounts be offered to group A or to group B, to neither group,…A monopoly barber sells haircuts to adults for 30 and A monopoly barber sells haircuts to adults for $30 and to children for $10. Let ηΑ represent adults’ elasticity of demand for haircuts and let ηC represent children’s elasticity of demand.a. Explain why |ηΑ| and |ηC| must both be greater than 1.b. Find a formula for ηA in terms of ηC.c. What is the largest possible value for |ηΑ|? A monopoly barber sells haircuts to adults for 30 andFigure 15-11In 2011, Verizon was granted permission to enter the market for cable TV in Upstate New York, ending the virtual monopoly that Time Warner Cable had in most local communities in the region. Figure 15-11 shows the cable television market in Upstate New York.Refer to Figure 15-11. Following the entry of Verizon, the subscription price falls from PM to PC. What is the increase in consumer surplus as a result of this change? Choix de groupe de réponses the area A + B + C the area D + F the area B + C the area B + C + D
- The director of a theater company in a small college town is considering changing the way he prices tickets. He has hired an economic consulting firm to estimate the demand for tickets. He has hired an economic consulting firm to estimate the demand for tickets. The firm has classified people who go to the theater into two groups and has come up with two demand functions. The demand curves for the general public (Qgp) and students (Qs) are given as Qgp = 2,000 – 10P and Qs = 800 – 8P a) Graph the two demand curves on one graph, with P on the vertical axis and Q on the horizontal axis. If the current price of tickets is $70, identify the quantity demanded by each group. b) Find the price elasticity of demand for each group at the current price and quantity. c) Is the director maximizing the revenue he collects from ticket sales by charging $70 for each ticket? Explain. d) What price should he charge each group if he wants to maximize revenue collected from…Please answer the following, a diagram and one paragraph should help support your answer. With consideration for elasticity (especially PED), what would be one industry in which the government instituting a subsidy would make sense and why? EXAMPLE: It would make sense for the government to subsidize the fashion industry because it is generally elastic in terms of PED, and it would benefit both producers and consumers due to etc.Sam is a personal trainer working for private clients. He just moved from California to a city on the East Coast and he needs to create his newclient base. A colleague told him that on the East Coast personal trainers face an inverse demand P = 300 – 20Q, that is when working with Qclients, a personal trainer can find one more client willing to pay P = 300 – 20Q for a weekly training session. Sam’s opportunity cost of a twohour training session is MC = 10Q. We make the heroic assumption that clients are infinitely divisible so that we can use calculus to solveSam’s profit maximizing problems.At first, Sam doesn’t read East Coasters that well and he can’t tell who is willing to pay more money for training sessions. Hence, he chargesall clients the same price.a) In part naively in part to get to know more people, Sam decides to sign up any customer willing to pay a price at least as high as his marginalcost of time. That is, Sam behaves like a price-taker. How many clients does he…