On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity. Next, use the purple points (diamond symbol) to shade the profit, the green points (triangle symbol) to shade the consumer surplus, and the black points (plus symbol) to shade the deadweight loss in this market without price discrimination. (Note: If you decide that consumer surplus, profit, or deadweight loss equals zero, indicate this by leaving that element in its original position on the palette.) PRICE (Dollar per pair of Ooh boots) 10 o MCATC MR Demand 40 80 120 160 200 240 280 320 360 400 QUANTITY (Pairs of Ooh boots) Monopoly Outcome Consumer Surplus ◇ Profit + Deadweight Loss Now, suppose that Barefeet can practice perfect price discrimination that is it know each consumer's willingness to pay for each pair of Ooh boots and is able to charge each consumer that amount. nosher stude

On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity. Next, use the purple points (diamond symbol) to shade the profit, the green points (triangle symbol) to shade the consumer surplus, and the black points (plus symbol) to shade the deadweight loss in this market without price discrimination. (Note: If you decide that consumer surplus, profit, or deadweight loss equals zero, indicate this by leaving that element in its original position on the palette.) PRICE (Dollar per pair of Ooh boots) 10 o MCATC MR Demand 40 80 120 160 200 240 280 320 360 400 QUANTITY (Pairs of Ooh boots) Monopoly Outcome Consumer Surplus ◇ Profit + Deadweight Loss Now, suppose that Barefeet can practice perfect price discrimination that is it know each consumer's willingness to pay for each pair of Ooh boots and is able to charge each consumer that amount. nosher stude

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

Consider the market for bicycles in the fictional province of Westvale. The market demand function for bicycles is given by P=300-2Q. The marginal cost curve for firms in this market is given by P=40+Q. Prices are measured in dollars. a) Under a competitive market equilibrium, what is the price of a bicycle? b) How many bicycles are produced under a competitive market equilibrium? c) Calculate consumer surplus, producer surplus, and total surplus under the competitive market equilibrium Suppose that the firms that were once competing in this market merge into one single firm, forming a monopoly. This monopoly has a marginal revenue function of P=300-4Q. d) What price does this monopolist charge? e) How many bicycles does the monopolist produce? f) Calculate consumer surplus, producer surplus, and total surplus under the monopolistic market outcome g) How much deadweight loss resulted from the creation of the monopolist?
Professional football teams earn substantial revenues through ticket sales. (Note: each team is the only seller for the tickets). To maximize profit, they offer significantly lower ticket prices for children (whose demand is elastic) than those for adults (whose demand is inelastic). This discount may be as much as 50 percent. If this type of price discrimination increases revenue and profit, why don’t teams also price discriminate at the concession stands by offering half-price soft drinks and peanuts to children? Critically discuss.
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…
The following graph displays four demand curves (PP, QQ, RR, and SS) that intersect at point V. PRICE (Dollars per unit) 2 = 18 16 14 12 10 2 P 2 4 D +xxx W 6 8 10 12 QUANTITY (Units) R + 14 16 18 20 Using the graph, complete the table that follows by indicating whether each statement is true or false. Statement Between points V and X, curve QQ is inelastic. Between points V and W, curve PP is perfectly inelastic. Curve QQ is less elastic between points V and X than curve RR is between points V and Y. True O O O False O O O
Gasoline for cars is produced in a market. There are equations for the Supply and Inverse Demand of car gasoline that model its Supply and Demand graph. These equations are (for supply), P = 20 + Qs, and (for Inverse Demand), P = 80 - Qd. Due to gasoline shortages, some sellers may be able to get access to more gasoline and produce it better than others. As a result, the federal government placed a quantity restriction of 15 units on the sellers. (Part I) Draw the market equilibrium with the government intervention (Q** and P**) of the quantity restriction. Please label the graph for slopes, the equilibrium point, etc. (Part II) What is the market equilibrium without the intervention of the government? (Part III) The government decided that the previous quantity restriction was not sufficient. So, it increased the restriction from 15 units to 20 units. Consequently, what is the new market equilibrium point with this new intervention? It is not necessary to label this point on the…
Your task is to show what the profit of this firm might look like using a key economics diagram. To make graphing easier, we will consider the price of the Ozempic drug for the middle-income country Bangladesh, which is $38 (assumed the profit-maximising price). For this task, you will be required to illustrate and explain to a typical first-year undergrad student who has no economics background the profit the firm makes at $38 per month, and what has happened to profit (producer surplus), markup, consumer surplus and the output if the price was reduced from $38 to $10 per month.
#5
Currently, perfect price discrimination-in which each person is charged a price at (or a smidge below) their reservation price, which is also their marginal benefit-is mostly a hypothetical scenario. However, as data mining becomes more ubiquitous, we may see markets that more closely resemble perfect price discrimination through individual pricing. a. Use a graph to illustrate perfect price discrimination. b. Explain how perfect price discrimination benefits the seller and depict the new producer surplus on the graph. c. Explain how perfect price discrimination benefits the buyer and depict the new consumer surplus on the graph.d. Explain how perfect price discrimination impacts the total market quantity. e. Discuss whether the new equilibrium quantity is a socially optimum level.
The information in the table below shows the demand schedule for water in a certain small town. Assume the marginal cost of supplying water is constant at $4 per bottle. Price Quantity (bottles) $9 200 $8 400 $7 600 $6 800 $5 1000 $4 1200 $3 1400 $2 1600 (Note: You may want to extend this table to generate additional data. If you do, you need not submit the extended table.) 1. Suppose there is only one supplier of water in this market, what will be its price and quantity for water? (MAKE THE SOLUTIONS READABLE!!!) 2. If there are two suppliers of water in the market (Victor and Sam) and they are able to collude and successfully form a cartel and agree to divide the market evenly, what would be the price of water and what quantity of water will each firm sell? How much profit will each seller earn (show solution)? 3. Suppose the town enacts new antitrust laws that prohibit Victor and Sam from operating as a monopolist.…
a. suppose that the supermarkets combine to form one chain. Using a new diagram, show the equilibrium price and quantity. What is the deadweight loss in this case? Indicate the consumer and producer surplus, how have they changed? b.Assume that the newly formed supermarkets chain can perfectly price discriminate (hint: it means they can charge each consumer the maximum price they he/she is willing to pay – think about our experiment in the lecture deriving the demand curve for your favourite singer’s tickets). How much will be sold and what will be the deadweight loss in this case? Discuss how policymakers approach these sorts of situations, and why.
What can you say about the price, with and without price discrimination
Viking Publishing House observed that in the recent years books on nature conservation and climate change have been very popular. As a matter of fact, Jane Goodall's latest book, "The Book of Hope: A Survival Guide for an Endangered Planet" has been a best-seller and Viking estimates the following demand curve for the book: P = 150 - Q In this equation, P is the price of the book and Q denotes yearly sales in thousands 20,000 books would be expressed as Q = 20 books. In other words, Viking estimates that it incurs a cost of $40 for printing and shipping of each book and pays a $10 royalty to Jane Goodall for each book sold. a. Calculate the profit maximizing OUTPUT and PRICE for this book. Also, calculate the TOTAL PROFITS.