A car hire company has 110 cars available for hire, which are fully booked out for the next 4 days. All cars available for hire are considered to be of similar quality (e.g. in terms of size, features, fuel consumption, etc.), so each car was hired for $120 per car per day. (Furthermore, assume for the purpose of this question that hire cars are non-transferrable, which means that customers with hire cars are unable to sell their booking for a higher price to someone who missed out on securing a hire car). The maximum a consumer was willing to pay to hire a car was $225 per car per day (where total cars hired would = 0 if the price of hiring a car was any higher). Assuming a linear demand curve, what was the consumer surplus from one day only? Answer to the nearest whole number in dollars (i.e. with no decimal places).

A car hire company has 110 cars available for hire, which are fully booked out for the next 4 days. All cars available for hire are considered to be of similar quality (e.g. in terms of size, features, fuel consumption, etc.), so each car was hired for $120 per car per day. (Furthermore, assume for the purpose of this question that hire cars are non-transferrable, which means that customers with hire cars are unable to sell their booking for a higher price to someone who missed out on securing a hire car). The maximum a consumer was willing to pay to hire a car was $225 per car per day (where total cars hired would = 0 if the price of hiring a car was any higher). Assuming a linear demand curve, what was the consumer surplus from one day only? Answer to the nearest whole number in dollars (i.e. with no decimal places).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: In 2020, the annual wage "ceiling for workers aged 62-64 was $18,240 How large of a monthly Social…

A: The annual wage ceiling for workers who belong to the age group of 62-64 is $18,240. The maximum…

Q: month. (Green power is generated from solar, wind power, and methane sources.). a. If a certain…

A: The Average Cost is the per unit cost of production obtained by dividing the total cost (TC) by the…

Q: Cost, Revenue & Profit For these problems, xx will represent the number of items and yy will…

A: Slope intercept form: Y=AX + B

Q: that a certain company sells each kg of the product it manufactures at $80, it is also known that…

A: The break point in economics aspects, business — and explicitly cost bookkeeping — is the place…

Q: Bill is a small farmer. You ask Bill how he decides whether to plant beans or corn. He claims the…

A: Production, in economics and business, alludes to the most common way of changing over inputs or…

Q: Cameron sells premium steak at the local market. He has a lot of customers due to the promising…

A: Price discrimination is a pricing strategy in which the same provider offers the same or…

Q: An oil-producing country estimates that the demand for oil (in millions of barrels per day) is D(p)…

A: Price elasticity of demand measures the magnitude of change in the quantity demanded for a good due…

Q: QH: Use the demand function D(p)=(p-10)^2 * (p+10)^2 for p values between 0 and 10. Suppose there is…

A: Answer -

Q: When sold for $260,000.00, Ferraris have an annual supply of 6431 vehicles and an annual demand of…

A: The information of price and quantities are given as follows: Where, P1 = 260000P2 = 276000Qd1 =…

Q: A publisher for a promising new novel figures fixed costs (overhead, advances, promotion, copy…

A: Break even Point : Break even point can be defined as a point below which no producer will sell as…

Q: Uver is a ride-sharing service that has become very popular in large cities. In one of these large…

A: The economics of the taxi cab market is based on the interplay of supply and demand, shaped by…

Q: Dataware is trying to determine whether to give a $10 rebate, cut the price $6, or have no price…

A: Business economics is concerned with navigating complex market scenarios that necessitate extensive…

Q: Assume a company expects to sell 6 million packages of Pop-Tarts Gone Nutty! in the first year after…

A: Cost is the value of money that has been used up to produce something or deliver a service, and…

Q: usage to 208 riders per day. Calculate the price elasticity of demand for bus tickets to determine…

A: The price elasticity of demand (PED) is used to show the responsiveness of the quantity demanded of…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Defining consumer surplus

VIEW

Step 2: Calculating the consumer surplus

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Cost, revenue, and profit are in dollars and x is the number of units. Suppose that the marginal revenue for a product is MR = 1800 and the marginal cost is MC = 90Vx + 4, with a fixed cost of $600. (a) Find the profit or loss from the production and sale of 5 units. There is a -Select-- | of $ (b) How many units will result in a maximum profit? units
a bakery charges $ 1.50 for donuts , and $ 2.25 for its scones. one day the manager found out that 150 scones had been sold out , and the total recepits were $ 258. how many donuts and scones were sold?
When comparing a gross lease to a NNN lease, some of the key differences being lower rent for the tenant at the risk of paying any additional cost out of pocket such as repairs. This would normally be the responsibility of the landlord as with a gross lease. Although the tenant has more control, this also means more risk for them and work of upkeep. This makes a NNN more beneficial for a landlord, and may explain why it’s more common on commercial properties. Residential tenants tend to give gross leases in case any expenses arise the situation will be covered without extra cost to the tenant. This is a discussion from one of my classmates I'm supposed to respond to their post it's only a discussion
"A taxi company currently has nine cabs in its fleet, and its total daily cost is $4,000. If the company added a 10th cab, its daily total cost would be $4,200, or $420 per cab. Adding the 10th cab will increase the daily total revenue by $300. Should the company add the 10th cab? (Yes/No)"
Website Profit You operate a gaming website, www.mudbeast.net, where users must pay a small fee to log on. When you charged $3 the demand was 1120 log-ons per month. When you lowered the price to $2.50, the demand increased to 1400 log-ons per month. (a) Construct a linear demand function for your website and hence obtain the monthly revenue R as a function of the log-on fee x. R(x) = = (b) Your Internet provider charges you a monthly fee of $50 to maintain your site. Express your monthly profit P as a function of the log-on fee x. P(x) = Determine the log-on fee you should charge to obtain the largest possible monthly profit (in dollars). X = $ What is the largest possible monthly profit (in dollars)? $ LA
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.