please do this Consider the following simplified scenario. Imagine that the Australian national rugby union(for short, Rugby AU) has exclusive rights to organize the games played by the national team.Rugby AU decides that the next match, between the Wallabies and the All Blacks (i.e., theAustralian and the New Zeeland national rugby teams), will be hosted at the Marvel Stadiumin Melbourne. Rugby AU has no fixed costs for organizing the game, but it must pay a marginalcost MC of $20 per seat to the owners of the Marvel Stadium. Two types of tickets will be soldfor the game: concession and full fare. Based on any official document that attests to their age,children and pensioners qualify to purchase concession tickets that offer a discounted price;everyone else pays the full fare. The demand for full-fare tickets is QF(P) = 120- 2P. Thedemand for concession tickets is Qc(P) = 80-2P.1. The market for full fare tickets (F)a)Calculate the inverse demand, write the profit maximizing condition, compute theprofit maximizing price PM and the number of tickets QM that Rugby AU will chooseto sell at full fare, as well as its profit .b) Use a diagram to illustrate the producer surplus PSF that Rugby AU enjoys, theconsumer surplus of the full fare paying customers CSF, and the deadweight lossDWLF in this market. Then, compute CSF and DWLF.c) Tax per unit (TU): The government decides to tax Rugby AU at $10 per ticket sold.Find the new optimal price PM and quantity Q that Rugby AU chooses andcompute its profit . Compute the government's tax revenue TRTU.d) Lump sum tax (LS): Instead of a tax per unit, the government imposes a lump tax of$400 on Rugby AU. Find the new optimal price PM and quantity Q that Rugby AUchooses and compute its profit in this case.e) Suppose that the government is looking to tax Rugby AU to raise revenue for buildingnew sport facilities for kids and hires you to advise which one of the taxes above - atax per unit or a lump sum - to implement. Which one of the two taxes would yourecommend? Justify and explain why.2. The market for concession tickets (C)f) Calculate the inverse demand, write the profit maximizing condition, compute theprofit maximizing price PM and the number of concession tickets QM that Rugby AUwill choose to sell, as well as its profit M.

# MC (Marginal cost) = $20 # Demand for Full Fare Tickets : Q = 120 - 2P # Demand for concessional…

Consider the following simplified scenario. Imagine that the Australian national rugby union (for short, Rugby AU) has exclusive rights to organize the games played by the national team. Rugby AU decides that the next match, between the Wallabies and the All Blacks (i.e., the Australian and the New Zeeland national rugby teams), will be hosted at the Marvel Stadium in Melbourne. Rugby AU has no fixed costs for organizing the game, but it must pay a marginal cost MC of $20 per seat to the owners of the Marvel Stadium. Two types of tickets will be sold for the game: concession and full fare. Based on any official document that attests to their age, children and pensioners qualify to purchase concession tickets that offer a discounted price; everyone else pays the full fare. The demand for full-fare tickets is Qr(P) = 120 - 2P. The demand for concession tickets is Qc(P) = 80 - 2P.

Consider the following simplified scenario. Imagine that the Australian national rugby union (for short, Rugby AU) has exclusive rights to organize the games played by the national team. Rugby AU decides that the next match, between the Wallabies and the All Blacks (i.e., the Australian and the New Zeeland national rugby teams), will be hosted at the Marvel Stadium in Melbourne. Rugby AU has no fixed costs for organizing the game, but it must pay a marginal cost MC of $20 per seat to the owners of the Marvel Stadium. Two types of tickets will be sold for the game: concession and full fare. Based on any official document that attests to their age, children and pensioners qualify to purchase concession tickets that offer a discounted price; everyone else pays the full fare. The demand for full-fare tickets is Qr(P) = 120 - 2P. The demand for concession tickets is Qc(P) = 80 - 2P.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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