A cable TV company offers, in addition to its basic service, two products: a Sports Channel (Product 1) and a Movie Channel (Product 2). Subscribers to the basic service can subscribe to these additional services individually at the monthly prices P, and P₂, respectively, or they can buy the two as a bundle for the price Pg. where P

A cable TV company offers, in addition to its basic service, two products: a Sports Channel (Product 1) and a Movie Channel (Product 2). Subscribers to the basic service can subscribe to these additional services individually at the monthly prices P, and P₂, respectively, or they can buy the two as a bundle for the price Pg. where P

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 4SQ

See similar textbooks

Similar questions

I used to buy 3 movies a month, but when Connecting U dropped the price of a gigabyte of data from a high of $20 to a low of $14.48 (a total decrease of 32.02 percent according to the midpoint formula), I want to buy 5 movies a month. A) My demand for movies increases by 33.34% B) My demand for movies increases by 66.67% C) My demand for movies increases by 50% Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Q2. Your brother is considering two cell phone providers i.e. UFONE and MOBILINK. UFONE charges Rs.520 (super card) per month for the service regardless of the number of phone calls made. MOBILINK does not have a fixed service fee but instead charges Rs. 1 per minute for calls. Your brother's monthly demand for minutes of calling is given by the equation Q = 150 - 50P, where P is the price of a minute a. With each service provider, what is the cost to your brother of an extra minute on the phone? b. In light of your answer to (a) part, how many minutes would your brother talk on the phone with each service provider? c. How much would he end up paying each provider every month?
ABC Co, a store that sells various types of sports clothing and other sports items, is planning to introduce a new design of Arizona Diamondbacks’ baseball caps. A consultant has estimated the demand curve to be Q = 2,000 - 100P where Q is cap sales and P is price. How many caps could ABC sell at $6 each? How much would the price have to be to sell 1,800 caps? Suppose ABC were to use the caps as a promotion. How many caps could ABC give away free? At what price would no caps be sold? Calculate the point price elasticity of demand at a price of $6.
Describe the difference between an everyday low price strategy (EDLP) and a high/low price strategy
A) The monthly demand function for particlar prodct q = f(p) = 30000 - 25p Determine the quadratic total revenue function, where Ris a function of p or R=g(p). What is the concavity of the function?What is the q intercept?What does total revenue equal at a price of $60? How many units will be demanded at this price? At what price will total revenue be maximized? B) Consder the linear equation 4x -3y = 36 What is the slope of the line represented by the given equation?What is the slope of any line perpendicular to the given line? C) Find ?′(2) and determine the values of x for which ?′(?) = 0i)?(?) = ??2?-2? ii)?(?) = (2? − 8)5
Your brother is considering two cell phone providers i.e. UFONE and MOBILINK. Q2. UFONE charges Rs.520 (super card) per month for the service regardless of the number of phone calls made. MOBILINK does not have a fixed service fee but instead charges Rs. 1 per minute for calls. Your brother's monthly demand for minutes of calling is given by the equation Qd = 150 - 50P, where P is the price of a minute a. With each service provider, what is the cost to your brother of an extra minute on the phone? b. In light of your answer to (a) part, how many minutes would your brother talk on the phone with each service provider? c. How much would he end up paying each provider every month?
Andy's monthly demand (in number of bars) for "Clif Builder's" protein bars is given by 9 = 8 - 2P + (I - T) /1000, where I is Andy's monthly income, T is his monthly income tax expense and P is the price of Clif bars. a) Suppose the price of Clif bars is $3.00, Andy's monthly income is $7,500, and his monthly income tax expense is $2,500. Calculate Andy's Clif bar consumption at that price, and determine his consumer surplus. b) Suppose Andy's income tax expense is decreased by 40% (his income and the price of Clif bars remain the same. Calculate the change in Andy's consumption and the change in his consumer surplus after the tax decrease. c) Illustrate your answers to parts a) and b) on a graph. Briefly explain.
Suppose that the demand function of a new face cream is described by the demand function: Q(P, A) = P -1/2A 1/4 , where Q represents the quantity demanded, P represents price, and A represents advertising expenditures. (i) Compute the price elasticity of demand (eD) and the advertising elasticity of demand (eA ). (Please show your detailed calculations).
Given the utility function U = X0.5+Y0.5 and budget constraint I=Px X+ Py Y,(a) Is this utility function is homothetic?(b) Derive the consumer’s demand functions for goods X and Y.(c) Obtain the numerical values of the own-price elasticity, cross-price elasticity, and the income elasticity of demand for X and Y.(d) Derive the indirect utility function and the expenditure function for this consumer.e) Obtain the compensated demand functions for goods X and Y. (f) Prove that the Slutsky equation holds in this case.
At the beginning of the year 2021, three friends, Ebo, Michael and Joseph decided to set up a company that produces a special kind of fruit juice called BB fruit juice in a city called St. Botch. As fresh graduate from the University of Professional Studies, Accra, you were employed as the firm's general manager in charge of the day to day running of the company. In order to make informed decisions about the firm's product, you employed an economist, who estimated the demand curve of the firm's product by using information from 30 supermarket as follows: Q$ = 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 +…
You are a division manager at Toyota. If your marketing department estimates that the semiannual demand for the Highlander is Q = 150,000 – 1.5P, what price should you charge in order to maximize revenues from sales of the Highlander?
Consider the horizontal sum of the two demand curves P = 8- Q and P = 12- Q. When 8