7. (Figure 10.5) Suppose that a firm offers customers either (1) the ability to buy any quantity they desire for $24 per unit or (2) a price of $18 per unit for 15 or more than under the $24-per-unit pricing scheme, so the plan to charge these types of consumers a price of units. Consumer surplus under the quantity discount is $24 per unit is_____ compatible. Price (S) 40- 30- 24 20- 18- 10- 0 6 8 10 12 14 16 18 20 22 Quantity 11 15 $64 more; incentive $32 less; not incentive $53 less; incentive O $41 more; not incentive

7. (Figure 10.5) Suppose that a firm offers customers either (1) the ability to buy any quantity they desire for $24 per unit or (2) a price of $18 per unit for 15 or more than under the $24-per-unit pricing scheme, so the plan to charge these types of consumers a price of units. Consumer surplus under the quantity discount is $24 per unit is_____ compatible. Price (S) 40- 30- 24 20- 18- 10- 0 6 8 10 12 14 16 18 20 22 Quantity 11 15 $64 more; incentive $32 less; not incentive $53 less; incentive O $41 more; not incentive

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.13P

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14. (Figure 10.11) If a firm uses a two-part tariff pricing strategy, the entrance fee is is Price (5) 28. 20- 18- 16- 14 12- 10- 8- 6- 4- 2 Oa. $12; $8 Ob. $8; $12 Oc. $8; $16 Od. $16; $8 MC MR 4 5 6 7 8 910 Quantity and the per-unit price
34) Suppose that when the price per ream of recycled printer paper rises from $4 to $4.50, the quantity demanded falls from 800 to 600 reams per day. Using the midpoint formula, what is the price elasticity of demand (in absolute value) over this range? A) 0.003 B) 0.41 C) 2.43 Page Ref: 187-188 D) 4 34)
6. Suppose that a firm offers customers either (1) the ability to buy any quantity they desire for $24 per unit or (2) a price of $18 per unit for 15 or more units. What type of pricing strategy is this?
On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $30, $45, $60, $75, $90, $105, and $120 per bike. 1280 1200 Total Revenue 1120 - 1040 980 880 800 720 640 560 o15 30 45 60 75 90 105 120 135 150 165 180 PRICE (Dollars per bike) According to the midpoint method, the price elasticity of demand between points A and B is approximately ▼ Suppose the price of bikes is currently $30 per bike, shown as point B on the initial graph. Because the demand between points A and B is a $15-per-bike increase in price will lead to in total revenue per day. In general, in order for a price decrease to cause a decrease in total revenue, demand must be TOTAL REVENUE (Dollars)
4. You have been hired as a consultant to estimate the demand for various brands ofcoffee in the market. You are provided with annual price data for two years by U.S.state and the quantities sold. You want to estimate a demand function for coffeeusing this data. What problems do you think you will encounter if you estimatedthe demand equation by OLS?
Subject: e
Table 1 The information in the table below shows the total demand for premium-channel digital cable TV subscriptions in a small urban market. Assume that each digital cable TV operator pays a fixed cost of $200,000 (per year) to provide premium digital channels in the market area and that the marginal cost of providing the premium channel service to a household is zero. Quantity Price (per year) $180 10 1,500 3,000 4,500 6,000 7,500 9,000 10,500 12,000 13,500 15,000 16,500 18,000 $165 $150 $135 $120 $105 $90 $75 $60 $45 $30 $15 Iso Refer to Table 1. Assume there are two profit-maximizing digital cable TV companies operating in this market with the same cost structure. Further assume that they are able to collude on the quantity of subscriptions that will be sold and on the price that will be charged for subscriptions. How much profit will each company earn, given that the two firms split the market equally? O A. $205,000 O B. $405,000 O C. $550,000 O D. $610,000
5 In a discussion with your friend, LeeAnna, you mentioned you have studied Price Elasticity of Demand (PED) as well as the various costs that impact production. LeeAnna, who happens to own a Pizza store is worried about the declining profitability of her store. She needs your advice on what she should do to increase her profit. Provide good economic advice to LeeAnna, using the concepts you have learned from your chapters 1 - 6 (especially paying close attention to PED and production costs). In your advice, put into consideration the nature of her competition, what variables impact the profit of an organization, and which of these variable(s) can the business owner control to increase profit? How can the PED of a product, in this case, pizza, impact how much price the owner of the store can change?
17_economics
8. Critical analysis Q13 Suppose Raphael, the owner-manager of a local hotel, projects the following demand for his rooms: Price Quantity Purchased ($) (per Day) 90 200 135 180 180 140 The price elasticity of demand between $90 and $135 is_____ in absolute value. This means that if Raphael raises the price from $90 to $135, his total revenue will______ (rise/fall/constant). The price elasticity of demand between $135 and $180 is______ in absolute value. This means that if Raphael raises the price from $135 to $180, his total revenue will_________(rise/fall/constant) .
3. Using the midpoint method The following graph shows two known points (X and Y) on a demand curve for tomatoes. 0102030405060708090100109876543210PRICE (Dollars per pound)QUANTITY (Thousands of pounds of tomatoes)DemandXYSlope: -0.05 According to the midpoint method, the price elasticity of demand for tomatoes between point X and point Y is approximately (0.05 / 0.2 / 0.25 / 5) , which suggests that th demand for tomatoes is (elastic / inelastic ) between points X and Y.
Table 18-2 The information in the following table shows the total demand for internet radio subscriptions in a small urban market. Assume that each company that provides these subscriptions incurs an annual fixed cost of $20,000 (per year) and that the marginal cost of providing an additional subscription is always $16. Quantity Demanded (Internet radio subscriptions) Price (Dollars per subscription per year) 0 64 500 60 1,000 56 1,500 52 2,000 48 2,500 44 3,000 40 3,500 36 4,000 32 4,500 28 5,000 24 5,500 20 6,000 16 6,500 12 7,000 8 7,500 8,000 4 0 Refer to Table 18-2. Assume there are two internet radio providers that operate in this market. If they are able to collude on the quantity of subscriptions that will be sold and on the price that will be charged for subscriptions, then their agreement will stipulate that O a. each firm will charge a price of $20 and each firm will sell 3,000 subscriptions. ○ b. each firm will charge a price of $40 and each firm will sell 3,000…