5. You are the manager of a firm that sells a product to two groups of consumers in different parts of the country. Analysts at your firm have determined that group 1's elasticity of demand is -3, while group 2's is -6. Your marginal cost of producing the product is 400. Determine your prices under third-degree price discrimination.
Q: 5. A steam boiler is purchased on the basis of guaranteed performance. A test indicates that the…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: Quantity Private Value Private Cost External Cost (Units) (Dollars) (Dollars) 1 2 3 4 5 6 7 Table…
A: External cost are the cost borne by the third party. A Market equilibrium is where the Private value…
Q: Please answer the question using the figure below. Corn and soybeans are alternative crops that…
A: Corn and soybeans are alternative crops that could be grown by most farmers. Corn and soybeans are…
Q: Use the following table to determine the levels of M1 and M2 In the United State Money Categories in…
A: M1 and M2 are money supply which are also part of narrow money. M1 includes currency, demand…
Q: The production function of a firm is f(x, y) = x + y. The marginal product of input x diminishes…
A: The production function shows the relationship between the input used and the output produced. The…
Q: You have an investment opportunity that costs $35,000 and eight years later pays a lump-sum amount…
A: Given Initial investment amount P=$35000 Future amount received F=$100,000 Time period (n)=8 years…
Q: The graph illustrates the unregulated market for pesticide. When the factories produce pesticide,…
A: Dead weight loss: It is defined as the loss of total welfare (or the total surplus = consumer…
Q: Worldwide quarterly sales of a brand of cell phones were approximately q = −p + 156 million phones…
A: This question is rely on the idea of equilibrium price. Knowing the situation of equilibrium price…
Q: What would likely happen to the level of economic activity if the government took the necessary…
A: When a government spends more money than it brings in from taxes and other sources of income, it has…
Q: 8. A fundamental criticism of the traditional theory of the firm is that the decision makers in the…
A: Since you have posted multiple questions, we will provide the solution only to the first question as…
Q: A monopolist faces a market inverse demand function: P = 250 – 5Q and marginal cost function: ATC =…
A: Demand function : 250 - 5Q MC = 10 Markup is the margin charged by monopoly over its marginal…
Q: Jason owns a small pizza restaurant, where he works full time in the kitchen. His total revenue last…
A: Explicit costs is the monetary expenses on raw material , wages , etc Implicit costs are the…
Q: 500 400 300 200 ✔ 100 Pumpkin 100 200 300 400 500 Wonderland produces and consumes two goods,…
A: A production possibilities frontier (PPF) is a graphical depiction of all the possible combinations…
Q: :12 Refer to the figure below. When the MC₂ line crosses the D₂ line, profits for the firm are P AC…
A: Economic profit per unit is the difference between price and average cost.
Q: Suppose the country X has the following monetary asset information as of year 2010: Cash in…
A: There are four standard measures of the money supply. i.e., M1, M2, M3 and M4.
Q: Jean deposited P2,000, P2,500 and P3,000 at the end of the 2nd year, 3rd year and 4th year,…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: Given the following information, what would be the value of M1? Small time deposits $650…
A: Money supply is used to calculate the flow of money in the economy. The money is the medium of…
Q: Y=16.8-3.9x (3.8) (1.2)
A: Y=16.8-3.9x (3.8) (1.2) The numbers 16.8 and -3.9 are the realized values for the intercept…
Q: 2. A retirement fund earns 6% interest, compounded quarterly. If $1,000,000 is desired to be in the…
A: Present value is the value of investment in today's dollar Future value is the value of investment…
Q: Question 3 Figure 6-23 ↑price 9- 8 3 O $3. O $4. O $5. Safet Refer to Figure 6-23. The price paid by…
A: Demand curve is the downward sloping curve. Supply curve is the upward sloping curve. Equilibrium…
Q: . Find the Nash equilibrium of the following modified Rock-Paper-Scissors game: • When rock (R)…
A: In game theory, the term "Nash equilibrium" refers to a situation in which every player in a game is…
Q: Suppose that you are given the following information: Total population Adult, noninstitutionalized,…
A: The labor force participation rate is calculated as follows: LFP = Unemployed +…
Q: investigate real and current issues within the field of macroeconomics relating about Gross Domestic…
A: Macroeconomics is a field of economics that deals with the behavior of the economy as a whole,…
Q: . Make a written report about Consumer Aggregate 2.Adv and Disadv of consumer aggregate 3.Make a…
A: The total wealth, income, and spending of all individuals within an economy is known as the consumer…
Q: What is the equilibrium payoff of player 1? PLAYER 1 Up Down PLAYER 2 Left 35, 35 18, 28 Right 58,41…
A: Dominant strategy is the strategy that yields higher payoff and the strategy does not change with…
Q: Suppose that Far North Canadian Lumber, Ltd., sells lumber in Canada at a price of $1,000 per 1,000…
A: Dumping means exporting a product to a foreign country at a price that is lower than the price…
Q: Consider the perfectly competitive market for dress shirts. The following graph shows the marginal…
A: Shutdown Price: In perfect competition, the shutdown price is that point where the firms denied to…
Q: 4. Jake's Free Runoff Bottled Water Company Produces with the Long Run Production Function…
A: Production function represents the relationship between the output and inputs. The inputs are the…
Q: Examples from Miami and Israel indicate that labor migration sometimes: O reduces wages in both the…
A: Labor markets: The labor market reflects the space where labor demand meets the labor supply. The…
Q: Looking at the "The gains from Trade" what are the major current and future problems facing the…
A: The benefits that people, businesses, and nations can get from engaging in international trade are…
Q: Suppose the Federal Reserve set the reserve requirement at 20%. Assume that banks lend all reserves…
A: Reserve requirement = 20% =0.20 Transaction…
Q: The following table indicates the unit prices (in Rands) and quantities of three goods purchased…
A: Index numbers are quantitative indicators that show how price and quantity vary over time. Economic…
Q: Name at least one fiscal policy and one monetary policy the federal government enacted in response…
A: Fiscal policy: The use of government spending and taxation policies to influence economic activity,…
Q: A government decided to make a 25-year loan on $2,500,000 at 10% interest to a "Toll Road…
A: The term "annual payment" describes the sum of money that is paid or received for a specific…
Q: Consider a public good, G. There are two consumers, A and B, whose marginal benefit curves are shown…
A: The parito optimal in case of public good is where the sum of marginal benefit of all the people is…
Q: Identify the most likely type of causal relationship for the two situations below, and explain why.…
A: Cause and effect relation: When one event leads to the other event such as the independent variable…
Q: On the following graph, use the green line (triangle symbol) to plot the demand curve for Falero's…
A: The perfect competition is the market condition in which there are many buyers and sellers in the…
Q: When all of a firm's inputs are doubled, input prices do not change, and this results in the firm's…
A: Economies of scale is when there is increasing returns to scale. Diseconomies of scale is when…
Q: What is the present equivalent of a uniform series of quarterly payments of $4,500 each for 6 years…
A: Given: Interest rate = 8% compounded bimonthly Quarterly payments @ $4,500 each quarter for 6 years…
Q: Suppose money demand depends on disposable income, so that the equation for the money market becomes…
A: Money Market Equilibrium : LM relation => M/P = L (r , Y- T ) Goods market equilibrium : IS…
Q: What is the cross elasticity of demand between peanut butter and chocolate spread (use the midpoint…
A: A positive cross elasticity indicates that the two goods are substitutes, while a negative cross…
Q: Instruction: Solve the Nominal and Effective Interest rates and add your conclusion on the problem.…
A: The interest rate quoted on a loan or investment is known as the nominal interest rate since it does…
Q: Which of the following is correct about R-squared? 1. R-squared measures the goodness-of-fit of…
A: R-squared, also known as the coefficient of determination, is a statistical measure that evaluates…
Q: Using either Hofstede what is the country profile of a European country?
A: The cultural aspects theory of Hofstede offers a framework for contrasting and comparing the…
Q: Compare and contrast the monopoly and oligopoly market .
A: A market is a system where buyers and sellers can trade commodities, services, or other valuables.…
Q: Which of the following production technology exhibits constant returns to scale? I. f(K, L) = K0.25…
A: The constant return to scale states that increasing capital (K) and labor (L) by X% will increase…
Q: improvement in technology usually result in lower cost of production or new and improved consumer…
A: Life expectancy is a statistical measure of how long an individual is expected to live based on…
Q: Calculate the economic impact of the India Premier League. a) Evaluate the net economic change…
A: The Indian Premier League (IPL) is a professional Twenty-20 cricket league that was established in…
Q: In some labor markets, the supply of labor is as follows (where W represents wages and L represents…
A: In a labor market, employers and job seekers can meet and exchange labor services in exchange for…
Q: Suppose the Federal Reserve sets the reserve requirement at 10%, banks hold no excess reserves, and…
A: The money multiplier refers to the potential increase in the money supply that can be generated by…
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
- Q.7. Vijay Dairy is selling flavoured milk and buttermilk in packets of 150 ml. The dairy sells 2000 packets of flavoured milk and 1000 packets of buttermilk every day. The former is priced at Rs.6 and the latter at Rs.4. A market survey estimates the cross-price elasticity (both ways) to be +1.8 and the own price elasticity of flavoured milk to be -1.3. The dairy is contemplating a 10 % reduction in the price of flavoured milk. Should it go ahead with the price reduction?You are a pricing manager at a generic pharmaceutical distributor. The CEO of the company calls a meeting of all the managers and states that it is critical to increase revenue soon or you may have to start laying off employees. You know that the price elasticity of demand for your leading generic drug is 1.5 and you sell it for three times what it costs. As the pricing manager, you shouldA firm estimates its price elasticity of demand for poutine to be -2 and its elasticity of demand with respect to advertising to be 0.1. The firm currently charges $10 and sells 10,000 units. What will lead to a larger increase in revenue: a $2 drop in price (while keeping advertising constant) or doubling the amount of advertising (while keeping the price constant)?
- Macmillan Learning You have been appointed head of marketing for Barry's Younique Yachts. Barry, the CEO, is interested in determining whether offering his yachts at a lower price would increase the firm's revenue. He asks you for advice. Using your knowledge of elasticity, you should tell Barry that he should increase his prices. Demand for yachts is perfectly inelastic, so a price increase will cause total revenue to increase. that he should reduce his prices. Yachts are luxury goods and therefore exhibit a high price elasticity of demand. Thus, reducing prices would increase revenue. that he should increase his prices. Demand for yachts is likely to be elastic because they are so much fun to drive. Thus, increasing prices would increase revenue. that he should reduce his prices. Yachts are a necessity and therefore have a low price elasticity of demand. Thus, reducing prices would increase revenue.QUESTION 7.1 You own a miniature golf course on the boardwalk in Ocean City, New Jersey. Right next to you on the boardwalk is another miniature golf course. Your golf course has a dinosaur theme. Your competitor's course is newer and has several impressive waterfalls and original hole designs that are attractive to your avid miniature golf fan. From past experience you have determined that the own-price elasticity of demand for your golf course is -1.5. You also know that the cross-price elasticity of demand for your course with respect to your competitor's price is +0.8. You suspect that your competitor's own-price elasticity of demand is -1.5 as well, but that the cross-price elasticity of demand for his course relative to your prices is only +0.4 due to the more modern design features. Currently you charge $5.00 for a round of miniature golf and have 2,000 customers in a typical week. Your competitor charges $7.50 for a round of golf and currently has 3,000 customers in a typical…Question 29 Assume lawyer services have an elasticity of demand of 0.5 in absolute value. Currently, a lawyer charges $300 per consultation and she has 100 consultations per week. If she raises her rate to $450 per consultation (a 50% increase) her revenue will (use the general formula for elasticity not the midpoint formula) fall from $30,000 per week to $28,500 per week. rise from $30,000 per week to $31,500 per week. rise from $30,000 per week to $33,750 per week. fall from $30,000 per week to $26,000 per week.
- George has been selling 7,000 T-shirts per month for $7.00. When he increased the price to $9.00, he sold only 6,000 T-shirts. Which of the following best approximates the price elasticity of demand? -0.6769 -0.6154 -0.3077 -0.5538 Suppose George's marginal cost is $4 per shirt. Before the price change, George's initial price markup over marginal cost was approximately . George's desired markup is . Since George's initial markup, or actual margin, was than his desired margin, raising the price wasExplain why the advertising elasticity of the market demand for beer may be less than the advertising elasticity of the demand for one particular brand.Beowoof is the only kennel for two neighboring counties, East Liverpoodle and West Liverpoodle. The elasticity of demand for kennel services is 4 in East Liverpoodle and 10 in West Liverpoodle. The price charged per week in East Liverpoodle is $60. If Beowoof can successfully separate these two markets, how much should it charge per week in West Liverpoodle?
- In 2003, when music downloading first took off, Universal Music slashed the average price of a CD from $21 to $15. The company expected the price cut to boost the quantity of CDs sold by 30 percent, other things remaining the same. What was Universal Music’s estimate of the price elasticity of demand for CDs? If you were making the pricing decision at Universal Music, what would be your pricing decision? Explain your decision.Typed and correct answer please. I ll rateAt the beginning of the year 2021, three friends, Ebo, Michael and Joseph decided to set up a company that produces a special kind of fruit juice called BB fruit juice in a city called St. Botch. As fresh graduate from the University of Professional Studies, Accra, you were employed as the firm's general manager in charge of the day to day running of the company. In order to make informed decisions about the firm's product, you employed an economist, who estimated the demand curve of the firm's product by using information from 30 supermarket as follows: Q$ = 99.5 – 2.5P, + 1.25P, – 0.21 + 0.15N + 0.04A Where Qg is the quantity demanded of BB fruit juice in bottles, P, is the per pottle price of BB fruit juice, P, is the per pottle price of Blue Sky, I is the per capita income of the people of St. Botch, N is the number of consumers and A is amount of money the company spends on advertising. In addition, the economist also estimated the supply function for the product as: Qi = -78 +…What is price discrimination? Explain how the theories of elasticity, if used, can help suppliers make decisions on product prices.