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 thatrevealed two different demand curves at your movie theaters. On weekends the inverse demand function isPWeekend 15-0.001 QWeekend_and on weekdays the inverse demand function isPWeekday 10 0.001 * QWeekdaywhere Q is the number of movie goers and P is the price of a movie. You acquire legal rights from movie producers to show their films for $20,000 per movie, plus a $2 "royalty" for each movie-goerentering your theaters (the average moviegoer in your market watches a movie only once).MRWeekend 15 -0.002 QWeekendMRWeekday 10-0.002"QWeekday1. What are the profit maximizing prices and quantities for Weekend and Weekday markets?2. Draw the graphs of both the Weekend and Weekday markets and determine the optimum prices and quantities3. What are the elasticities of demand for the Weekend and Weekday markets?4. For third degree price discrimination, what is the relationship between pricing and elasticity of demand in the two markets?5. Under what conditions can a firm do third degree price discrimination?

(1)The supply function can be written as Qs=2000+2P. From the supply function inverse supply…

Answered: As a manager of a chain of movie…

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

Home work CH 6.34 In 2005 Uber and Lyft had not entered the market yet and the New York City taxi cab commission could set prices and restrict entry into the market for taxi cab rides. New York City taxi cabs provided a quantity of 100 rides in 2005. For simplicity, suppose every taxi cab ride was identical. Each ride lasted 10 miles and the price of each ride was $50. At this price, the price elasticity of demand was -5.0. Taxi drivers in this market faced two costs. First was the cost of purchasing a yellow Ford Crown Vic taxi cab. Second was the cost of gasoline, which was $2 per gallon at the time. The Ford Crown Vic could travel 20 miles for each gallon of gasoline. If the New York City taxi cab commission's objective were to maximize economic profits, what price should they charge for each ride? (Hint, first find the demand curve.)
The demand function for specialty steel products is given, where p is in dollars and q is the number of units. please answer parts b and c
In her spare time, your colleague is selling hand-carved wooden boxes on Etsy. The boxes are currently priced at $30/box. Your colleague is not happy with their current revenue stream and asks for your advice. You estimate that demand for your colleague's hand-carved wooden boxes is: Q = 800-20P. If your colleague is looking to maximize revenue, how should they price their wooden boxes? Keep prices at $30/box Lower prices to $20/box Raise price to $40/box Lower price to $25/box Raise prices to $35/box
The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfighter, reduced the price of its electric toothbrush from $35 to $25. As a result, Stopdecay's sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecay's toothbrush and Decayfighter's toothbrush? -1.61 O 1.61 0.62 O -0.62 The value of the arc cross elasticity between these products suggests that they are If Stopdecay knows that the arc price elasticity of demand for its toothbrush is -1.6, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. O $30.75 $28.46 $21.96 O $25.00 It Stopdecay does not change its price, the average monthly total revenue would be the same number of units as it did before, the average monthly total revenue would be…
The demand function for specialty steel products is given, where p is in dollars and q is the number of units. p = 135V110 - g (a) Find the elasticity of demand as a function of the quantity demanded, q. (b) Find the point at which the demand is of unitary elasticity. q = Find intervals in which the demand is inelastic and in which it is elastic. (Enter your answers using interval notation.) inelastic elastic (c) Use information about elasticity in part (b) to decide where the revenue is increasing, and where it is decreasing. (Enter your answers using interval notation.) increasing decreasing Use information about elasticity in part (b) to decide where the revenue is maximized. q =
Suppose a local supermarket runs a discount campaign on the sales of shampoos using discount coupons – any customer who shows a discount coupon will be offered an X% discount on the original retail price on Black Friday. Suppose the supermarket estimates that coupon users have a demand elasticity of -4 while non-coupon users will have a demand elasticity of -2.5. What should be the value for “X”? Explain with calculations. Be step-by-step. (Hint: Take the ratio between the prices for coupon and non-coupon users.)
A company produces a special new type of TV. The company has fixed costs of $494,000, and it costs $1100 to produce each TV. The company projects that if it charges a price of $2500 for the TV, it will be able to sell 700 TVs. If the company wants to sell 750 TVs, however, it must lower the price to $2200. Assume a linear demand. What price should be set to earn maximum profits?
You are the producer of computer components. There are two markets – foreign and domestic – with elasticity of demands that are E = 4 and E, = 2 respectively. The price in the domestic market is $12 per unit. If you are practicing third degree price discrimination, then the price per unit in the foreign market should be: 4 8. 10
A company produces a special new type of TV. The company has fixed costs of $477,000, and it costs $1100 to produce each TV. The company projects that if it charges a price of $2500 for the TV, it will be able to sell 750 TVs. If the company wants to sell 800 Tvs, however, it must lower the price to $2200. Assume a linear demand. What price should the company charge to earn a profit of $953,000? it would need to charge $_____.
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(31,92) = 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
A company estimates that the weekly sales q of its product is related to the product's price p by the function q= 11900 p10 where p is in dollars. Currently, each unit of the product is selling for $5. a. Determine the point elasticity of demand of this product. (Do not round e; answer exactly.) The point elasticity of demand is & = Round these next two parts to the nearest whole number. b. Determine the effect on revenue if the price were decreased by 1%. If the price were decreased by 1%, the revenue will Select an answer by $ c. Determine the effect on revenue if the price were decreased by 5%. If the price were decreased by 5%, the revenue will Select an answer by $ Select an answer
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS