Alchem (L) is the price leader in the polyglue market. All 10 other manufacturers (follower [F] firms) sell polyglue at the same price as Alchem. Alchem allows the other firms to sell as much as they wish at the established price and supplies the remainder of the demand itself. Total demand for polyglue is given by the following function (QT = QL+QF): P = 15,000 4QT Alchem's marginal cost function for manufacturing and selling polyglue is MCL = 5,000+ 6QL and the aggregate marginal cost function for the other manufacturers of polyglue is MCF = 2,000+4QF. To maximize profits, Alchem should produce units and charge a price of $ What is the total market demand for polyglue at the price established by Alchem? per unit. units.

Alchem (L) is the price leader in the polyglue market. All 10 other manufacturers (follower [F] firms) sell polyglue at the same price as Alchem. Alchem allows the other firms to sell as much as they wish at the established price and supplies the remainder of the demand itself. Total demand for polyglue is given by the following function (QT = QL+QF): P = 15,000 4QT Alchem's marginal cost function for manufacturing and selling polyglue is MCL = 5,000+ 6QL and the aggregate marginal cost function for the other manufacturers of polyglue is MCF = 2,000+4QF. To maximize profits, Alchem should produce units and charge a price of $ What is the total market demand for polyglue at the price established by Alchem? per unit. units.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Use the Profit Function and explian each step
The Star Theater is the only movie theater in Hollywood, SC, and therefore it has price-setting power. The Star Theater has two distinct types of customers: (i) senior citizens and (ii) non-senior citizens. The demand curve among senior citizens is: y₁ = 100-10p₁, for p₁ 10, where y₁ is the number of seats demanded by senior citizens at a senior citizen ticket price of p1. The demand curve among non-senior citizens is: y2 = 140-10p2, for p2 14, where y2 is the number of seats demanded by non-senior citizens at a non-senior citizen ticket price of p2. The Star Theater's cost function is C(31, 32) = C(y1 + y2) = F + (y1 + y2), where F is the fixed cost of operating the theater and y₁ and y2 are (as already defined) the number of senior citizen and non-senior citizen customers, respectively. By how much does the Star Theater increase profits if it operates as a third-degree price discriminator instead of as a single-price monopolist? $0 $10 $20 $30
As a manager of a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand on weekends than during the week. You therefore conducted a study that has revealed two different demand curves at your movie theaters. On weekends, the inverse demand function is P = 35 -0.001Q; on weekdays, it is P = 25-0.002Q. You acquire legal rights from movie producers to show their films at a cost of $25,000 per movie, plus a $3.00" royalty" for each moviegoer entering your theaters (the average moviegoer in your market watches a movie only once). What type of pricing strategy should you consider in this case? multiple choice Block pricing First degree price discrimination Third degree price discrimination Second degree price discrimination What price should you charge on weekends? Instructions: Enter your response rounded to two decimal places. $ What price should you charge on weekdays? Instructions: Enter your response rounded to two decimal places. $
Suppose the European Union (EU) was investigated and proposed a merger between two of the largest distillers of premium Scotch liquor. Based on some economists’ definition of the relevant market, the two firms proposing to merge enjoyed a combined market share of about two-thirds, while another firm essentially controlled the remaining share of the market. Additionally, suppose that the (wholesale) market elasticity of demand for Scotch liquor is −1.4 and that it costs $14.80 to produce and distribute each liter of Scotch.Based only on these data, provide quantitative estimates of the likely pre- and postmerger prices in the wholesale market for premium Scotch liquor.Instructions: Do not round intermediate calculations. Enter your final responses rounded to the nearest penny (two decimal places).Pre-merger price: $ Post-merger price: $
In a monopolistically competitive industry, a firm has a short-run and long-run cost function C = 150 + 20Q + 5Q2 The demand function for the firm's product is Q = α – P. (C = cost, Q = quantity, P = price, α = parameter). (i) If α = 116 short, determine the quantity, the price and profit of the business. (ii) What is the firm's demand function at long term equilibrium? MAKE A GRAPH
A private golf club has two types of members. Serious golfers each have the demand curve Q = 250 - 10P, where Q represents the number of rounds played per year and P is the per- round price. Casual golfers have the demand curve Q = 100 - 10P. The club has 5 serious and 60 casual golfing members and faces a constant marginal cost and average cost of $ 5 per round played by either type of member. The club cannot distinguish high demanders from low demanders but is considering deploying a 2-part tariff pricing system? Specifically, the club is considering a per-unit price of $5 and a per-unit price of $6. What should they do and what are the profits they will earn? Be very clear in how you arrive at your answer.
You are the manager of a monopolistically competitive firm, and your demand and cost functions are given by Q = 36 – 4P and C(Q) = 124 + 16Q + Q2.a. Find the inverse demand function for your firm’s product b. Determine the profit-maximizing level of production and price. Quantity: ? Price: ? c. Calculate your firm's maximum profits. d. I expect profit to (blank), price to (blank), and quantity to (blank).
You are the manager of a monopolistically competitive firm, and your demand and cost functions are estimated as Q = 48 − 2P and C(Q) = 6 + 3Q + Q2. a. Find the inverse demand function for your firm’s product. P = − Q b. Determine the profit-maximizing price and level of production. Instructions: Round your response to the nearest penny (two decimal places). Price: $ Instructions: Round your response to one decimal place. Quantity: c. Calculate your firm’s maximum profits. Instructions: Round your response to the nearest penny (two decimal places). $ d. What long-run adjustments should you expect? Explain. multiple choice Entry will occur until profits are zero. Exit will occur until profits rise sufficiently high. Neither entry nor exit will occur.
The average consumer at a firm with market power has an inverse demand function of P 10 - Q. The firm's total cost function is C = 3Q. If the firm engages in two-part pricing, what is the optimal fixed fee to charge each consumer? Multiple Choice $75.50 $24.50 $64.50 $32.50