Problem 3 Squeak eClean produces commercial sanitizer used to clean tanker trucks that haul liquid food products such as milk. This sanitizer a commodity like any other and at the wholesale level, there are many domestic and foreign producers that compete vigorously. Suppose you have the following estimated market demand and supply functions for the sanitizer. Qd=248.08 +2.2Y-0.6Pc+ 1.2 Ps - 4P Qs=10+2P In these equations, Q measures output in gallons per month (in 1,000's), P is the price per gallon of the sanitizer, Y is annual average household income (in 1,000's), Pc is an index of commodity prices, and Ps is the average price per gallon of other types of sanitizer. After gathering the latest data, you find that average household income is $36,400, the current level of the commodity price index is 110.6, and the average price per gallon of other types of sanitizers is $48.50. a. Find the current equilibrium price and quantity in this market. b. Find the equilibrium price and quantity in this market if the government imposes a $9 per gallon tax on sanitizers. c. What will happen to the price buyers pay per gallon as a result of the tax? d. What price will sellers receive (net price) per gallon after the tax?

Problem 3 Squeak eClean produces commercial sanitizer used to clean tanker trucks that haul liquid food products such as milk. This sanitizer a commodity like any other and at the wholesale level, there are many domestic and foreign producers that compete vigorously. Suppose you have the following estimated market demand and supply functions for the sanitizer. Qd=248.08 +2.2Y-0.6Pc+ 1.2 Ps - 4P Qs=10+2P In these equations, Q measures output in gallons per month (in 1,000's), P is the price per gallon of the sanitizer, Y is annual average household income (in 1,000's), Pc is an index of commodity prices, and Ps is the average price per gallon of other types of sanitizer. After gathering the latest data, you find that average household income is $36,400, the current level of the commodity price index is 110.6, and the average price per gallon of other types of sanitizers is $48.50. a. Find the current equilibrium price and quantity in this market. b. Find the equilibrium price and quantity in this market if the government imposes a $9 per gallon tax on sanitizers. c. What will happen to the price buyers pay per gallon as a result of the tax? d. What price will sellers receive (net price) per gallon after the tax?

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

Hand written solutions are strictly prohibited.
A 100-miles long highway connects two landmarks, A and B. 10000 households are uniformly dis- tributed along this highway and have a round-trip travel cost of $1 per mile. a) A single household has a valuation of $40 per family cinema ticket. A for-profit cinema-chain has a cost to open a cinema theater of $50000. Find the optimal number of cinema theaters. b) A single household has a valuation of $40 for a picnic in a park. The state wants to open a few paid parks along the highway that will be funded by taxpayers. Each park requires $50000 to be constructed. How many parks should the state open?
At what price would a customer in Europe be charged when buying a new BMW? Please do not put a separation comma between every 3 digits. For example, if the answer is 65 thousand dollars, put 65000 in the answer field.
(Figure: Pharmaceutical Pills Sales I) A pharmaceutical company sells its pills in foreign and domestic markets. Domestic Market Foreign Market Price ($) 20 Price ($) 20 18 18 16 16 14 14 12 12 10 10 8 8 6 6 MC MC 4 4 2 MR 2 D MR D 0 0 2 4 6 8 10 12 2 4 6 8 10 12 Quantity Quantity Suppose the company must charge the same price in each market. The profit-maximizing price is $ ○ 12 ○ 8.67 7.67 ○ 7.00
Problem 05-19 The A-1 Corporation supplies airplane manufacturers with preformed sheet metal panels that are used on the exterior of aircraft. Manufacturing these panels requires only five sheet metal-forming machines, which cost $500 each, and workers. These workers can be hired on an as-needed basis in the labor market at $9,000 each. Given the simplicity of the manufacturing process, the preformed sheet metal panel market is highly competitive. Therefore, the market price for one of A-1's panels is $80. Based on the production data in the accompanying table, how many workers should A-1 hire to maximize its profits? Machines Workers Output 5 1 600 1,000 1,290 2 3 4 1,480 5 1,600 1,680 Number of workers:
A monopolist faces the demand curve P = 18 – Q, where P is measured in rands per unit and Q in thousands of units. The monopolist has a constant average cost of R6 per unit. 1. What are the monopolist’s profit-maximising price and quantity and what is its resulting profit? (8)
da 6 A market is characterised by an inverse demand curve p = 8 - 2O where Q is total quantity. Two firms, A and B, are competing à la Cournot and ta non TCA(qA) = 29A and TCB(qB) = 9 %3D %3D data Total profits n (Le. the sum of profit for the two firms) are equal to: ggio max. ontrassegna O (a) N = nda O (b) = 16 O (c)N = 4 O (d) = 9
What is the current market size and growth potential of the South African chrome market?
A monopolist is facing the following demand schedule Pa24-30 That is, Q0 implies Pe24, then Qefimplies P21, and Q-2 entals P18, and so one. Fixed costs will be neglected in this analysis. The marginal cost is constant and equal to 3 for every unit produced. Determina (a) The quantity produced and the amount of maximum profits (b) Price and quantity to yield the efficient solution (c) Redo (a) when we impose a sales tax equal to 4 (per unit sold).
Specify the market entry mode that Mecca Cola used to enter the global market?
Problem 11. Maximization of a scarce resources. Marawi Corporation has 52,000 available machine hours and has a fixed overhead rate of P4 per hour. It is considering to produce two popular products with the following production and costs data: Costs if purchased from outside supplier Direct materials Direct labor Factory overhead at P9 per hour Annual demand in units Dragon Ball P 70 11 25 18 20,000 Samurai X P 105 Required: 1. Assuming that there is no market limitation, which product should Marawi Corporation produce? 2. Considering the market limits, how would Marawi Corporation use its limited machine hours to maximize profit? 3. Assuming that the unit direct materials cost of Samurai X decreases to P10 and considering the market limit, how would the limited machine hours be used to maximize profit? 22 38 27 15,000
P 25 20 15 10 01 5 Country 1 s1 04 At a price of $0, country 1 will O a) offer for export 9 units of this product Ob) seek to import 9 units of this product Oc) choose not to trade Od) increase supply -IP d1 Q 0 0 3 6 9 1215182124 International market P S2 25 20 15 10 5 0 0 3 6 9 1215182124Q S1 -IP D2 D1 P Country 2 s2 25- 20 15 10- 5 d2 0 0 3 6 9 1215182124 Q IP