Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD: Demand: P- 1,200 - 10Q Total Revenue: TR= 1,2000 - 1o0 Marginal Revenue: MR 1,200- 200 Marginal Cost: MC - 300 + 100 where Q indicates the number of copies sold and Pis the price in Ectenian dollars. Complete the following table by finding the price and quantity that maximize the company's profit and the price and quantity that maximize social welfare. Price Quantity Scenario (Dollars) (DVDS) Maxie

Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD: Demand: P- 1,200 - 10Q Total Revenue: TR= 1,2000 - 1o0 Marginal Revenue: MR 1,200- 200 Marginal Cost: MC - 300 + 100 where Q indicates the number of copies sold and Pis the price in Ectenian dollars. Complete the following table by finding the price and quantity that maximize the company's profit and the price and quantity that maximize social welfare. Price Quantity Scenario (Dollars) (DVDS) Maxie

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose a certain city has a monopoly cable-television company. This company has total costs TC = Q2 + 10Q + 75. (Hint: using calculus, this means MC = 2Q + 10 since MC is the derivative of TC with respect to output.) The demand in the community is approximated by the equation Qd = 85 - P/2 (alternatively, you can write the demand equation as Qd = 85 – 0.5P). Graphically depict the demand curve as well as the marginal cost (MC) curve. If the cable company is free to choose its own price Pm and quantity Qm, graphically depict the monopoly equilibrium price and quantity. Add any other curve(s) to your diagram that may be required to obtain this outcome. Compute and state the exact monopolist equilibrium price Pm and quantity Qm that you depicted graphically.
An industry has the following cost function: C(X, Y ) = 1500+20X +20Y . Market demands for the 2 goods are given by PX =80−X, and PY =140−2Y Suppose the government wished to use two part tariffs in these markets, and suppose further that two part tariffs are feasible. Imagine that there are 10 consumer in each market. Solve for a set of two part tariffs (one for each martket) that pay the firm zero profits in total, yet achieves efficiency.
Question 1 Sal's Streaming Company streams TV shows to subscribers in the US and Canada. Demand is Qus 50 (1/3)Pus - QCA 80 (2/3)P CA = - where Q's are in thousands of subscriptions per year and P's are the subscription prices per year. The cost of providing Q units of service is given by TC = 1000 + 30Q, where Q = Qus+ QCA (a) What are the profit-maximizing prices and quantities for the US and Canadian markets? (b) As a consequence of a new VPN service that Facebook has developed, subscribers in Canada are now able to get the US streams and vice versa, so Sal can charge only a single price. What is the profit-maximizing single price that he should charge? (c) In which situation is Sal better off? In terms of consumers' surplus which situation do people in Canada prefer and which do people in the US prefer? Why?
At these levels of output the marginal revenue in the manufactured items market is and the marginal revenue in the semimanufactured raw materials market is . At these prices, the price elasticity of demand in the manufactured items market is and the the price elasticity of demand in the semimanufactured raw materials market is . (Hint: ED=PMR−P��=�MR−�) What are the total profits if the company is effectively able to charge different prices in the two markets? . If the company is required by law to charge the same per-ton rate to all users, the new profit-maximizing level of price and output are per ton and tons respectively. The total profits in this situation is .
A firm produces two substitute goods . Their demand curves and total cost function are given below : P1 = 130 - 4Q1-Q 2 P2 = 160-2Q1-5Q2 TC = 2Q1 +2Q1Q2 + 4Q 2 ( a ) Determine the profit maximizing outputs of both goods . ( Restrict your answers to 2 decimal points ) ( b ) Find the price elasticity of demand . ( c ) Evaluate the second order " Hessian " required for profit to be maximized .
Suppose that the demand curve for tickets to see a football team is given by Q = 36,000 - 4p and marginal cost = 1000 per customer. (Ten dollars as this is expressed in pennies) This can also be written as D(P) = 9000 -0.25 Q. MR = 9000-0.5 Q Suppose there are only 45,000 seats in the stadium. We would like for you to solve for the PRICE (in dollars) that the PROFIT MAXIMIZING UNREGULATED MONOPOLIST would charge. $30 O $90 $60 $50 O $70
Consider a housing market in which the rental properties are owned by 10 price-taking compa- nies. The cost function for each company is Jo C(q) = if q ≤ 10 if q> 10. That is, each company can offer any quantity up to its available rental space 10 at no cost, but it cannot offer any more than 10. Suppose the market demand is given by D(p) = 1000 p if p 1000, (c) Determine the point-price elasticities of demand and supply and state whether at the equilibrium price, they are elastic or inelastic. (d) Suppose the government imposes a 20% value added tax on rent. Calculate the equilibrium supply of housing, and determine the price paid by tenants and the price received by housing companies in equilibrium. Does the tax hurt tenants or create a dead- weight loss? Explain your answer!
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The function that relates the inverse of speed (1/S) (i.e., the time in minutes that it takes to travel 1 mile) to traffic (T) on a highway is 1/S = 4 + 0.05T. Demand for traffic (measure as traffic volume minute) on this road is T=6880-70 (1/S) Find the equilibrium traffic volume in the absence of any congestion toll. Find the marginal cost function for traffic volume, where cost is expressed as travel time per mile in minutes. per Find the optimal level of traffic volume. Find the optimal congestion toll, expressed in minutes. (Imagine that the congestion toll consists of sitting in the “penalty box" for this period of time.) The function that relates the inverse of speed (1/S) (i.e., the time in minutes that it takes to travel 1 mile) to traffic (T) on a highway is 1/S = 4 + 0.05T. Demand for traffic (measure as traffic volume per minute) on this road is T=6,880- 70-(1/S). a. Find the equilibrium traffic volume in the absence of any congestion toll. b. Find the marginal cost…
Problem 2: Presently, APlus Transport and Big Movers are the only suppliers of services that haul heavy construction equipment between jobs within the Midwest. No other suppliers have the equipment necessary to perform the service. The market inverse demand for these hauling services is given below. P = 4,030-4Q where P is price per trip and Q is total number of trips per year. For simplicity, also assume that neither firm has fixed costs. From company records, you are given the following variable cost function for each firm: a. C. TVC = 300 TVCB = 80QB b. Calculate the Cournot market equilibrium price-output solutions for each firm including their respective profits. d. Assume these two competitors operate as a two-firm Cournot duopoly. Find the reaction functions for each firm. Suppose Big Movers shuts down operations so that APlus now has a monopoly in this market. What is the price, quantity, and profits for APlus after this change? Summarize the results of your findings over the…
The FIA Formula 1 World Championship to be held during the 2021 Mexico City Grand Prix has a total cost function equal to CT = Q33 + Q2 + 125Q and an inverse demand function of P = 200−2Q. Now suppose there is a new company managing this event, so the total cost function becomes CT = 4Q. This new company intends to sell at two different prices depending on the place that the spectators occupy at the Hermanos Rodríguez Autodrome. For the Red Zone Boxes. The estimated demand will be q1 = 32−12p1 and for the Green Zone Boxes It will be q2 = 42 − p2. The number of tickets sold for the Red Zone and Green Zone will be: 15; 84 23; 16 15; 19 33; 45