Cho and Ginny are debating the use of coupons by grocery stores. Cho says, "The use of coupons in grocery stores represents a means of price discrimination. It's pure and simple. Coupons do reduce the price of groceries, but mostly to people who are less likely to buy at the full price." By contrast, Ginny contends, "Coupons do not constitute price discrimination. They simply represent a way of temporarily changing the prices of some grocery items. Coupons reduce the price for everyone, not just for those who are price sensitive." Economists generally agree with

Cho and Ginny are debating the use of coupons by grocery stores. Cho says, "The use of coupons in grocery stores represents a means of price discrimination. It's pure and simple. Coupons do reduce the price of groceries, but mostly to people who are less likely to buy at the full price." By contrast, Ginny contends, "Coupons do not constitute price discrimination. They simply represent a way of temporarily changing the prices of some grocery items. Coupons reduce the price for everyone, not just for those who are price sensitive." Economists generally agree with

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following graph shows the daily demand curve for bippitybops in Chicago. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. Total Revenue 0 8 16 24 32 40 48 56 64 72 80 200 180 160 140 120 100 80 60 40 20 0 PRICE (Dollars per bippitybop) QUANTITY (Bippitybops per day) Demand A B Area: 1280 Calculate the daily total revenue when the market price is $180, $160, $140, $120, $100, $80, $60, and $40 per bippitybop. Then, use the green point (triangle symbol) to plot the daily total revenue against quantity corresponding to these market prices on the following graph. Total Revenue 0 8 16 24 32 40 48 56 64 72 80 3840 3520 3200 2880 2560 2240 1920 1600 1280 960 640 320 0 TOTAL REVENUE (Dollars) QUANTITY (Bippitybops per day) According to the midpoints formula, the price elasticity of demand between points A and B on the initial graph is approximately . Suppose the…
Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Jabari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $160,000 to $120,000 per truck. Notice that Jabari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial five engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial five engines by selling at $120,000 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $120,000. PRICE (Thousands of dollars per fire engine) 220 200 180 160 140 120 100 80 60 40 20 Jabari 0 0 1 2 3…
I pretty sure I got the first part right. I am struggling with bottom parts.
Carlos's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Carlos produced four fire engines, but he has decided to increase production to five fire engines. The following graph shows the demand curve Carlos faces. As you can see, to sell the additional engine, Carlos must lower his price from $105,000 to $90,000 per fire engine. Note that while Carlos gains revenue from the additional engine he sells, he also loses revenue from the initial four engines because he sells them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial four engines by selling at $90,000 rather than $105,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $90,000. PRICE (Thousands of dollars per fire engine) 150 135 - 120 106 60 45 15 0 + Carlos 0 1 True + 2 False Demand + 6 3 4 5 7 QUANTITY (Fire…
Define price discrimination. Give two examples of price discrimination. How does perfect price discrimination affect consumer surplus, producer surplus and total surplus?
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $26, $14, $10, $5, and $3 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $10, $14, $26, $34, and $42 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Price Quantity Demanded Quantity Supplied ($ per widget) (widgets) (widgets) $3 $5 $10 $14 $26 $34 $42 In this market, the equilibrium price will be per widget, and the equilibrium quantity will be widgets.
Which of the following statements about price discrimination are true? Choose one or more: A. One example of price discrimination is Subway charging more for its footlong subs than for its 6-inch subs. B. One example of price discrimination is a movie theater charging a lower price for a 2:00 PM movie than it charges for the same movie at 8:00 PM. C. One example of price discrimination is a restaurant that provides a "senior discount" to people over age 50. D. Price discrimination usually leads to higher total surplus than single-price monopolies, and it can even maximize total surplus. a
Price discrimination is the practice of selling the same good at more than one price when the price differences are not justified by cost differences. Evaluate the following statement: "Price discrimination is not possible when a good is sold in a perfectly competitive market." False, because perfectly competitive firms do not profit maximize by setting marginal revenue equal to marginal cost None of these choices True, because perfectly competitive firms have no market power False, because perfectly competitive firms have market power Which of the following kinds of price discrimination occurs when each customer in a single market is charged the maximum price he or she is willing to pay? Perfect price discrimination Third-degree price discrimination Second-degree price discrimination ○ This is not an example of price discrimination
Please circle the answer so that I can understand. Specify each part to which answer it is related. If you write by hand, please write clearly so that I can understand. I appreciate your cooperation. Please answer the question. Please be careful in your answer and there are many times you answer wrongly.
Suppose the market for quiche is perfectly competitive, so sellers take the market price as given. Hilary manages a restaurant that offers quiche for sale. The following graph plots Hilary's weekly supply curve (orange line). Point A represents a point along her supply curve. The price of quiche is $2.25 per slice, which is given by the black horizontal line. PRICE (Dollars per slice) 9.00 8.25 7.50 6.75 6.00 5.25 4.50 3.75 3.00 2.25 1.50 0.75 0 0 Price Supply 2 4 Hilary's Weekly Supply A 6 8 10 12 14 16 QUANTITY (Slices of quiche) 18 + 20 22 24 Using the previous graph, you can determine that Hilary is willing to supply her 6th weekly slice of quiche for $ per slice, the producer surplus earned from supplying the 6th slice of quiche is $ Suppose the price of quiche were to rise to $3.00 per slice. At this higher price, Hilary would receive a producer surplus of $ slice of quiche she sells. Since she receives $2.25 from the 6th