RobbinGood sells financial trades to retail traders (r) and institutional traders (i) whose demand curves for financial trades are given by the following equations Demand (r): Q, = 1000 - 70P, Demand (i): Q: = (1000/6)- (70/6)P, thousand trades thousand trades and the marginal cost is a constant $1 per trade for either kind of trader. Suppose RobbinGood decides to set one price for each group, and maximize profits accordingly. Then, RobbinGood will sell[ Answer66A | thousands of trades to retail traders at a price of $[ Answer66B] per trade.
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- AmonopolysellsitsproductinboththeU.S.andJapanese markets. The American inverse demand function is PUS = 100 – QUS, and the Japanese inverse demand function is PJ = 80 – QJ. PUS and PJ are both measured in dollars. The firm’s marginal cost is MC = 20 in both countries. Suppose the company can prevent resales between these two countries. In order to maximize its profit, what prices should the monopoly firm charge in the two markets?A night-club owner has both graduate student and professor customers. The demand for drinks by a typical graduate student is QS=18-2P. The demand for drinks by a typical professor is QA=12-P. There are equal numbers of each. The marginal cost of each drink is $2. Assume no Sxed costs. If the owner can “card” patrons and determine who is a graduate student or professor and, in turn, can serve each group by offering a cover charge and a number of drink tokens to each group, which allows them to purchase drinks at marginal cost, what will the cover charge be for graduate students? Professors? What is the profit of the club owner under the token and cover charge pricing (same profit assumption as before)?Two dairy farmers produce milk for a local town with local milk demand given by Q=100-0.3333333333P(P denotes price measured in Rands, Q denotes the quantity measured in liters). Both farmers have the same cost function given by TC=150+2q(wheredenotes output). (h) What if farmer 1 is a leader and farmer 2 a follower, determine the price, quantity and profits made by these two farmers.
- Carl and Simon are two pumpkin growers who are the only sellers of pumpkins at the market. The demand function for pumpkins is Q = 8,400 - 800P, where Q is the total number of pumpkins that reach the market and P is the price of pumpkins. Suppose further that each farmer has a constant marginal cost of $.50 for each pumpkin produced. If Carl believes that Simon is going to produce Qs pumpkins this year, then the reaction function tells us how many pumpkins Carl should produce in order to maximize his profits. Carl’s reaction function is QCarl = Group of answer choices a. 2,000 - Qs/2. b. 8,400 - 800Qs. c. 8,400 - 1,600Qs. d. 4,000 - Qs/2. e. 6,000 - Qs.Suppose that there are two fancy hotels on the online booking platform, say W hotel and Ritz Carlton hotel. Each hotel has the capacity of 20 rooms on the New Year Eve. There are 20 families who are planning to stay at Bay Areas. Suppose that you are the manager and you set the price to maximize the hotel profit. The marginal cost of each hotel room = 500 RMB The largest valuation on the hotel room = 2000 RMB valuation decrease by 100RMS. In total, there are 20 families. Discuss with your peers how many rooms you will offer in the market.A. Suppose the inverse demand curve in a market is D(p) =a-bp, where D(p) is the quantity demanded and p is the market price. Firm 1 is the leader and has a cost function c1(y1)=cy1 while firm 2 is the follower with a cost function c2(y2 )=. Firm 1 sets its price to maximise its profit. Firm 1 correctly forecasts that the follower takes the price leader’s chosen price as given (price taker) and chooses output so as to maximise its own profit. Write down the profit function of the follower. Calculate the profit maximising quantity that the follower selects given the leader’s chosen price p (i.e., calculate the follower’s supply curve S(p)). Interpret the solution to the profit maximising problem. B. The leader is facing the residual demand curve R(p)=D(p)-S(p) with D(p) and S(p) as defined in (c) above. Calculate the leader’s residual demand curve using the result in (b). Solve for p as a function of the leader’s output y1, i.e. the inverse demand function facing the leader. Write…
- 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,eSuppose 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)Assume that there is only a single seller of papadums, and she knows eachbuyer’s willingness to pay. Assume that this seller incurs a cost of $4.00 perunit of papadum produced (i.e., the marginal cost is constant). If she intends to maximise profits, how many papadums would this seller supply to the market, and what price would she charge? Remember, the price has to be the same for each unit sold. Hint: start at a price of $17 and calculate what profit would be. Then lower the price just enough to attract an additional buyer and calculate what the new profit would be. Repeat this until all four buyers are purchasing the good and then check which price yields the highest profit. Alternatively, you can calculate the marginal revenue from lowering the price to attract an additional buyer and compare it to marginal cost.
- Question Consider a market with an inverse demand Function p = 60 -4*Q. There are two firms, an incumbent and an entrant. There is a constant variable cost of 6 and a unit capacity cost of 6. In the first stage, the incumbent chooses capacity. In the second stage, the entrant decides whether or not to enter and all active firms choose quantities (where the entrant also has to simultaneously choose its capacity in the second stage, if it enters). a. For a capacity of 5 units, what is the best response function of the incumbent in the second period? b. What is the Cournot-Nash equilibrium of the second stage if the incumbent chose a capacity of 5 units in the first stage conditional on the entrant entering? c. For a capacity of an arbitrary k units, what is the best response function of the incumbent? d. What is the Cournot-Nash equilibrium of the second stage if the incumbent chose a capacity of k units in the first stage conditional on the entrant entering? e. Solve for the subgame…AOF is the only firm selling beer around Isla Vitas, which has a beer fountain in the backyard so the marginal cost of producing beer is 0. There are two groups of consumers: students and non students. The students' beer inverse demand function is p = 60 – 6q , and the non-students' beer inverse demand function is p = 10 – 2q. AOF sells beer in two sizes: 10 ounces bottle and 5 ounces can. Due to a local act, the consumers can only buy either 1 bottle or 1 can of beer. AOF can charge different prices on each bottle and each can of beer, while it cannot tell whether a customer is a student or not. In order to maximize the profits, how much should AOF charge its 10 ounces bottle? Answer: 37.5 The correct answer is: 100.0Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed in the table. Reservation Price Customer ($/Rental) A B C D D E F O T Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island Bikes charges a different price in the morning and in the afternoon, then what will be its dally economic profit? O Multiple Choice O $27 $32 22 16 12 ē 8 $33 6 A 4 $39