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- 9ns g Table 3 Types Hardcover Price Paperback $9.99 Q $27.95 0.5 millions $1.50 AC Option 1: profit- $12.74 O Option 2: profit- $22.74 Option 3: profit $23.74 Option 3: profit- $21.72 O Option 2 profit-$12.735 O Option 1 profit -$13.225 1 millions $1.50 Given the information, the publisher has the following three pricing options: Option 1: Only sell the hardcover at $27.95 Option 2: Only sell the paperback at $9.99 Option 3: Sell hardcover at a price of $27.95 and paperback at a price of $9.99. Given the options, estimated quantities sold at each price and average cost, which price option would generate the most profit and how much is the profit? SearchNescafe charge offer coffee at OMR 2 in Oman and 3 OMR in UK. This is an example for O a. Demand based pricing O b. Tax based pricing c. Geographical pricing O d. Final pricing
- 1. TopGames buys the rights to sell a certain video game title worldwide. top games pay $400,000 for this right and the marginal cost of providing the video game download is zero. TopGames’ economist realizes they have two groups of customers: the 2,000 hard-core fans of this game who will pay up to $150 a year to be able to play this game; and the 10,000 casual gamers who will pay up to $50 a year to play this game. If TopGames can NOT price discriminate, what is its profit-maximizing price? What is its profit? a. Price = $50; Profit = negative $100,000 b. Price = $50; Profit = $300,000 c. Price = $150; Profit = $100,000 d. Price = $150; Profit = $500,0002. TopGames buys the rights to sell a certain video game title worldwide. top games pay $400,000 for this right and the marginal cost of providing the video game download is zero. TopGames’ economist realizes they have two groups of customers: the 2,000 hard-core fans of this game who will pay up to $150 a year to be able to play this…Coke and Pepsi dominate the cola market. Suppose that the marginal cost of making cola is $2. Assume also that the demand for cola is given by the following table: Price $8 7 6 S43N 5 2 1 Quantity 5 cans 6 7 8 9 10 11 12 If Coke was the only supplier of cola, how many bottles of cola would be sold? Type your answer...2. XYZ Company is specialized in mangoes distribution in the city of Muscat. Sales are 450 boxes (unit) per month. It costs OR 10 to make and receive an order and holding cost is OR 3.5 per box per year. The prices depend on quantities purchased such that the order quantities from 1 to 199 at a unit price RO 5; quantity 200 to 499 at a unit price 4.5 RO; and quantity 500 and more at a per unit price of 4 RO. If the discount option is considered, then the best decision that minimizes the total annual inventory cost is? a. 185 units, Total cost = 30,649 b. None is correct c. 450 units, Total cost = 23,500 O d. 500 units, Total cost = 22,583 e. 200 units, Total cost = 27,240
- 4. Your firm produces a computer software called "Model It", which is sold to other businesses. Its demand has been estimated to be: QM = 550- 4PM +1.5PS - 2.SI, where, QM denotes units sold of "Model It" software, PM denotes "Model It's" price, Ps denotes the price of a best-selling competitor, and I is the average income of its consumers. a. Currently, PM = $110, Ps= $152, and I = 60. What is the estimated quantity demanded (QM) for "Model It" software? b. What is the change in QM that results from a one unit ($1) change in the PM? C. Holding the values Ps= $152 and I = 60 equal, state the demand function for "Model It" in the format QM = ao + a₁PM and its demand curve (inverse demand function) PM = a - bQM. d. Assume that the price of the competitor's product (Ps) changes from $152 to $172 and that I is still $60, state the new demand function for "Model It" (the format should be QM = αo + α1PM) and its (inverse) demand curve (PM= a - bQM).Excrcise: PcQ)= 90-Q , mc= 30 Q: ca) Find thne opnmal Twe-block pricang quantities and prices pricing (b) Single monopliy pricing Pm 2 (C) row ca> cb) on the samc graph Calculate the CS, PS. DWL m part (a) N(b)15. Which of the following is not true of successful price discriminators? a. They could make greater profits by charging everyone a higher, uniform price. b. Their customers must differ in their willingness to pay. C. Their customers must have difficulty reselling the good to other customers. d. They must have monopoly power.
- If a firm charges a lower price they will have a lower profit margin but a higher profit; if a firm charges a higher price they will have a higher profit margin but a lower profit. Which of the following statements is accurate? A. The firm should charge a lower price for the higher profit. B. The firm should a higher price for the lower profit. C. The firm should charge a higher price for the higher profit margin. D. Whether the firm should charge a higher price or lower price indeterminate.2. Monopoly, Practice Question Firm P is a monopolist for a new drug that makes people feel thinner. the total cost function is C(Q) = 200 + 10Q + Q² The inverse demand function is p(Q) = 82 - Q (a) By how much do revenues increase if this firm sells one more (small) unit of output? By how much does its cost go up if it produces one more (small) unit of output? (b) What is the optimal price and quantity the monopolist should charge and sell? (c) What is the profit the monopolist makes? Should the firm shut down in the short or long run? (d) If the company increases its price by a small fraction (let us say 1%), by what proportion does demand go down? [Round to two decimal places.] (e) What percentage of the price is due to costs and what is due to markup? [Round to two decimal places.] (f) What is the deadweight loss of the monopoly pricing compared to competitive prices?Please fill in the blanks. Thank you