shown in the following table. Assume George has no fixed costs, and his cost of producing each portrait is $9.Reservationprice ($ perphoto)Customer50246423834307.26822a. Suppose George is permitted to charge two prices. He knows that customers with a reservation price above $30 never bother withcoupons, whereas those with a reservation price of $30 or less always use them. At what level should George set the list price of aportrait? At what level should he set the discount price? How many photo portraits will he sell at each price?List price of a portrait: $34Number of portraits to be sold at the list price:5 portraitsDiscount price of a portrait: $22Number of portraits to be sold at the discounted price:3 portraitsb. In this case, what is George's economic profit and how.much consumer surplus is generated each day?Economic profit: $117Consumer surplus: $|52

Customer Reservation price Total Revenue Marginal Revenue 1 $50 $50 2 $46 $96 $42 3 $42…

List price of a portrait: $ 34 Number of portraits to be sold at the list price: 5 portraits Discount price of a portrait: $ 22 Number of portraits to be sold at the discounted price: 3 portraits b. In this case, what is George's economic profit and how much consumer surplus is generated each day? Economic profit: $ 117 Consumer surplus: $ 52

List price of a portrait: $ 34 Number of portraits to be sold at the list price: 5 portraits Discount price of a portrait: $ 22 Number of portraits to be sold at the discounted price: 3 portraits b. In this case, what is George's economic profit and how much consumer surplus is generated each day? Economic profit: $ 117 Consumer surplus: $ 52

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A5Some online retailers include free shipping while others charge for shipping. In July 2006, bajangles.com offered a Sony 60-inch rear projection TV for $2,968.99 with free shipping, while MB superstore offered the same TV for $2,692.95 with shipping charge of $299.50 to Alaska. (a) Using relevant demand and supply curves, explain whether it matters for consumers if the retailer offers free shipping or charges for shippin (b) If consumers view bajangles.com and MB superstore as equivalent (in terms of quality of service), how should their prices for the same TV compare? Are the prices consistent with your answer in (a (c) If consumers are biased in decision-making by anchoring, how would that affect your answer in (a)?)?g.
Choose the best statement O A. Producer surplus is the excess of the value of the good over the market price, summed over the quantity produced OB. If producers decrease the supply of a good, their producer surplus will increase OC. Producer surplus equals the total revenue from selling the good OD. An increase in the demand for a good increases producer surplus
a. Demand for good Q is estimated to be Q = 14 - P, where P is price. If the prices rises from P = $3 to P = $6, then the lost revenue due to the quantity effect is b. A firm selling a product Q faces a demand where Q = 24 - P, where P is price. If the firm lowers the price from P = $20 to P = $16, then the lost revenue due to the price effect is
Please help answer the following questions
Consider the market for sweaters in a Hamilton neighbourhood shown in the figure to the right. The consumer surplus generated by consuming the 30th sweater is OA. $89.10. E O B. $79.20. OC. $49.50 O D. $39.60. OE. $19.50. 99 Price (3 69.0 49.5 30.0 Sweater Market 30.0 49.5 Quantity (Sweaters per week) Q S Q
John is looking to sell his car and Mary is looking to buy it. John values the car at $2000 and Mary values it at $3000. John offers to sell it to Mary at a price of $3500. Which of the following is true: O Mary will accept the offer and the total surplus will be $1000 Mary will not accept the offer and the total surplus yill be 0. O Mary will accept the offer but the total surplus will be less than $1000 O Mary will not accept the offer and the total surplus will be $1000. O None of the above
2. Ralph opened a small shop selling bags of trail mix. The price of the mix $5 and the market for trail mix is very competitive. Ralph's curves are shown in the figure bellow. Price $8 7 6 5 2 MC AC 2 4 6 8 10 12 14 16 18 20 22 24 Quantity a. At what quantity will Ralph produce? Why? b. When the price is $5, shade the area of profit or loss in the graph provided and calculate Ralph's profit or loss (round up).__ c. If all other sellers of trail mix have the same marginal and average costs as Ralph, should he expect more or less competition in future? In the long run, will the price of trail mix rise or fall? What will be the price of trail mix in the long run? Price will rise/fall in the LR. Price in the LR will be $
Demand A. $100 thousand B. $200 thousand OC. $600 thousand D. $800 thousand Supply 1 P= 50+ P=80-QD QD=80-P QS=2P-100 The equations above describe the demand and supply for Chef Emnie's Sushi-on-a-Stick. The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units. What is the value of producer surplus?
7. Producer surplus for an individual and a market Suppose the market for apple pie is a perfectly competitive market—that is, sellers take the market price as given. Eric owns a restaurant where he sells apple pie. The following graph shows Eric's weekly supply curve, represented by the orange line. Point A represents a point along his supply curve. The price of apple pie is $3.00 per slice, as shown by the horizontal black line.
Figure 15-11In 2011, Verizon was granted permission to enter the market for cable TV in Upstate New York, ending the virtual monopoly that Time Warner Cable had in most local communities in the region. Figure 15-11 shows the cable television market in Upstate New York.Refer to Figure 15-11. Following the entry of Verizon, the subscription price falls from PM to PC. What is the increase in consumer surplus as a result of this change? Choix de groupe de réponses the area A + B + C the area D + F the area B + C the area B + C + D
Draw the Supply and Demand Curves for the following schedule: Supply: There are six suppliers with cost of 12, seven suppliers with cost of 36, and seven suppliers with cost of 48. Demand: There are 10 demanders with cost of 50, and 10 demanders with cost of 24. Stripe the area of consumer surplus, and shade in the area of producer profit. Identify the equilibrium price and quantity.
What is the likely effect of this strategy on profits and consumer surplus compared to charging only a single price? a. Quantity increases, profits increases, welfare increases. b. Quantity increases, profits increases, welfare decreases. c. Quantity decreases, profits increases, welfare decreases. d. Quantity decreases, profits decreases, welfare decreases. e. None of the other answers is correct.