Hot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out the total cost schedule. Now suppose that the government places a fixed tax on Hot Air's profit of $50 a month. Calculate Hot Air's new profit-maximizing output and price. When Hot Air is producing its new profit-maximizing output, the number of rides it produces is a month and the profit-maximizing price of a ride is $. >>> Answer to 1 decimal place. Price (dollars per ride) 180 170 160 150 140 130 Quantity (rides per month) 0 1 2 3 4 5 Total cost (dollars per month) 25 150 285 430 585 750

Hot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out the total cost schedule. Now suppose that the government places a fixed tax on Hot Air's profit of $50 a month. Calculate Hot Air's new profit-maximizing output and price. When Hot Air is producing its new profit-maximizing output, the number of rides it produces is a month and the profit-maximizing price of a ride is $. >>> Answer to 1 decimal place. Price (dollars per ride) 180 170 160 150 140 130 Quantity (rides per month) 0 1 2 3 4 5 Total cost (dollars per month) 25 150 285 430 585 750

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Hot Air Balloon Rides is a single-price monopoly.
Columns 1 and 2 of the table set out the market demand
schedule and columns 2 and 3 set out the total cost
schedule.
Now suppose that the government places a fixed tax on
Hot Air's profit of $50 a month.
Calculate Hot Air's new profit-maximizing output and price.
When Hot Air is producing its new profit-maximizing output,
the number of rides it produces is a month and the
profit-maximizing price of a ride is $
>>> Answer to 1 decimal place.
C
Price
(dollars
per ride)
180
170
160
150
140
130
Quantity
(rides
per month)
0
G A WNIO
2
3
4
5
Total cost
(dollars
per month)
25
150
285
430
585
750

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When the government places a fixed tax on Hot Air's profit
of $50 a month, the profit-maximizing output
decreases
and the profit-maximizing price
does not change
does not change
increases
decreases
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