Kia Motors manufactures cars that are sold through dealers. The (daily) demand for Kia cars in a certain market is given byq(6) = -P+120and let the (constant) marginal cost of manufacturing a car be: MC =31.Suppose that Kia charges a fixed fee for the dealer to be able to buy cars in order to sell in its dealership (call it a membership fee), and charges a price p for every cardealer once the membership is paidWhat would the price that Kia charges the dealerWhat would the membership price beInstead suppose the market for dealers is perfectly competitive, and Kia charges a wholesale price w to the dealerWhat is the price that the dealer will setWhat will be the quantity the dealer will demand q(w)=What would be the price Kia will setWhat is the equilibrium quantity of Kia cars soldWhat are the profits of the dealersWhat are the profits of Kia

Demand: Demand for a commodity can be defined as the desire and willingness of a consumer to acquire…

Answered: Kia Motors manufactures cars that are…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Your college newspaper, The Collegiate Investigator, sells for 90¢ per copy. The cost of producing x copies of an edition is given by C(x) = 80+ 0.10x + 0.001x² dollars. (a) Calculate the marginal revenue R'(x) and profit P'(x) functions. HINT [See Example 2.] R'(x) = P'(x) = (b) Compute the revenue and profit, and also the marginal revenue and profit, if you have produced and sold 500 copies of the latest edition. $ $ $ $ revenue profit marginal revenue marginal profit Interpret the results. The approximate loss per additional copy per additional copy Interpret your answer. from the sale of the 501st copy is $ (c) For which value of x is the marginal profit zero? X = copies The graph of the profit function is a parabola with a vertex at x = copies. so the profit is at a maximum when you produce and sell I
Consider a firm that produces glass. Glass production involves melting sand, soda ash, and limestone at a very high temperature. Consider the following factors that a glass manufacturer faces, and determine whether each represents a technological constraint or a market constraint: Items (7 items) (Drag and drop into the appropriate area below) The number of buyers in the market Categories Cost per hour of keeping the furnace at the required temperature The number of other firms selling similar products Market constraint Drag and drop here Cost per pound of limestone Cost per pound of sand Technology constraint Drag and drop here Maximum amount of output per hour that can be produced Hourly wage of workers in the industry
A firm manufactures two goods labeled 1 and 2. It sells Qi items of good i for a fixed price per unit of pi. The total cost of producing good i is ciQi2.Explain briefly why the profit function is given byπ(Q1, Q2) = p1Q1 + p2Q2 − c1Q12 − c2Q22Find the values of Q1 and Q2 which maximize π and verify that the second-order conditions for a maximum are satisfied. Find an expression for the maximum profit.
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The next three problems are from Unit 10. You are provided with a pair of demand and cost functions. P=20,000-15.60 TC = 400,000 + 4640 Q + 100 Use the above functions and derive the maximum profits for the firm: Optimal Q = Optimal P = Optimal TR = Optimal profits - =
For less than $300, you can get a high-quality colour laser printer with four toner cartridges already fitted and roughly half-full. Replacing all four toner cartridges, on the other hand, might cost upwards of $400. Companies charge more for the replacement toner than the printer itself, therefore explain this in economic terms.
A microbrewery operates next to the Bushville Lake and uses water from the lake during production. The marginal cost of beer production is: MC = 8 + 2Q where Q is the quantity of beer produced (keg). The brewery sells its output at a market price of $40/keg. Because the industry is perfectly competitive, the brewery’s action does not affect the market price. The Bushville Lake is also used for kayaking and recreational fishing, but pollution from the brewery reduces the quantity of fish available and makes the lake very unpleasant. Each keg of beer produced emits a pound of pollutants that causes a loss of recreation opportunities worth $3. a) How much beer will be produced? b) What is the efficient level of beer production? If the government used a Pigouvian tax to achieve this goal, what would the tax be?
Consider the following problem: Demand: q = 100-p Retailer: marginal cost of selling r = 10 per unit Manufacturer: marginal cost of producing = 40 per unit Neither firm faces any competitor Suppose now that the retailer and the manufacturer are separate firms. Write down the profit function of the manufacturer if it sells to the retailer at w. You solved for the quantity the manufacturer will sell a minute ago, so you can use that in the profit function, and then you will have a profit function for the manufacturer that does not have p, but only has w in it. Solve for the optimal w for the manufacturer to charge and calculate the quantitysold under that w.
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A new restaurant – Uovo – has just opened in West L.A. It is serving the upscale market, with truly outstanding pasta that is flown in overnight from Bologna, Italy. Uovo offers a fixed-price menu with appetizer, three dishes of pasta, and a delicious tiramisu for dessert. The restaurant faces the following demand function: Q = 600 - 4P where Q is the number of guests per day. The marginal cost is constant at $50 per customer (including expenses for ingredients and personnel). The restaurant is paying a rent of $2,000 per day. What is the profit-maximizing number of guests that Uovo should serve each day, and what price should Uovo charge to maximize profit? What is the elasticity of demand at the optimal price and quantity? Is demand elastic or inelastic at this point? From what we learned in class, does it make sense for the restaurant to operate in this area of the demand curve (elastic/inelastic part)? What is the profit of the restaurant at the optimal price and quantity, and what…

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