Q5) Consumer Surplus 1,050,000 1.000.000 950,000- Price (dollars per car). 900,000- 850.000- 800.000- 2750.000- 700,000- 650.000- 600,000- 0 Fred Market Demand for Porsche Spyder Michel Hua Carlos John Marty If Bob's maximum price threshold increased by 30 percent, a. would he buy a Spyder at a market price of $847,975? b. how much consumer surplus would he have? Bob 8 Blaise Quantity Demanded(cars per year)

Q5) Consumer Surplus 1,050,000 1.000.000 950,000- Price (dollars per car). 900,000- 850.000- 800.000- 2750.000- 700,000- 650.000- 600,000- 0 Fred Market Demand for Porsche Spyder Michel Hua Carlos John Marty If Bob's maximum price threshold increased by 30 percent, a. would he buy a Spyder at a market price of $847,975? b. how much consumer surplus would he have? Bob 8 Blaise Quantity Demanded(cars per year)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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PRICE (Dollars per room) 500 450 400 350 300 250 200 150 Demand Graph Input 1001 Market for Big Winner's Hotel Rooms Price 300 (Dollars per room) Quantity 200 Demanded (Hotel rooms per night) Demand Factors Average Income 50 (Thousands of 100 dollars) 50 Airfare from YYZ to 200 LAS 0 (Dollars per 0 50 100 150 200 250 300 350 400 450 500 roundtrip) QUANTITY (Hotel rooms) Room Rate at Lucky (Dollars per night) 250 For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Big Winner is charging $300 per room per night. If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the Big Winner rooms per night to rooms per night. Therefore, the income elasticity of demand is from , meaning that hotel rooms at the Big Winner are good. If the price of an airline ticket from YYZ to LAS were to increase by 10%, from $200 to $220 roundtrip, while all other demand factors remain at…
26) Larry's Carpet Cleaners can influence demand by advertising. Larry charges $50 per carpet, and he cleans 150 carpets per month. The price elasticity of demand is -4, and Larry spends $500 per month on advertising. If Larry is maximizing profits, calculate the advertising elasticity of demand.
Question 3 Assume the ZRA decides to impose a new tax on imported vehicles priced above K200, 0 00. The new tax calls for a 15% tax on the higher-priced vehicles. However, the new tax al so causes the demand for vehicles to be cut in half from 1000 to 500 to compensate. Th is massive drop in demand has caused the supplier to cut back on supply from 1500 to 1000. Find a) The elasticity of supply and demand. b) If the tax incidence falls more on the supplier or the consumer (Calculate both the consumer and supplier tax burdens).
Consider a town in which only two residents, Hubert and Kate, own wells that produce water safe for drinking. Hubert and Kate can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water. Price Quantity Demanded Total Revenue (Dollars per gallon) (Gallons of water) (Dollars) 6.00 0 0 5.50 45 $247.50 5.00 90 $450.00 4.50 135 $607.50 4.00 180 $720.00 3.50 225 $787.50 3.00 270 $810.00 2.50 315 $787.50 2.00 360 $720.00 1.50 405 $607.50 1.00 450 $450.00 0.50 495 $247.50 0 540 0 Suppose Hubert and Kate form a cartel and behave as a monopolist. The profit-maximizing price is____per gallon, and the total output is_____gallons. As part of their cartel agreement, Hubert and Kate agree to split production equally. Therefore, Hubert's profit is _____, and Kate's profit is______. Suppose that Hubert and Kate have been successfully…
A. Using the mid point equation, calculate the price elasticity of demand for the market demand curve for a change from the equilibrium price of $4.00( show the equation and all calculations) is the demand curve elastic or I elastic for this price change? What would happen to the total market revenue if the price changed to $4.00 b. If a new firm(competitor) enters this market so that 6adsitional units are supplied at each price above $0, what would happen to the equilibrium price and quantity and the total market revenue of the market. Add a new market supply curve to your original graph and indicate the new equilibrium price and quantity on the appropriate axes.
2
1. The price per unit of X is 5, and the price per unit of Y is 10. Theconsumer currently has 435 in income. Now suppose that the price of X increases from 5 to 20. a) What is the price elasticity of demand for X?b) What is the income elasticity of demand for product X?c) What is the cross-price elasticity of demand between X and Y? Explain how you got the answers!
1. Exercise 14.1 The price elasticity of demand for a textbook sold in the United States is estimated to be -2, whereas the price elasticity of demand for books sold overseas is -3. The U.S. market requires hardcover books with a marginal cost of $40; the overseas market is normally served with softcover texts on newsprint, having a marginal cost of only $15. The profit-maximizing price in the U.S. market is that MR P× (1+ × (1+)) and the profit-maximizing price in the overseas market is (Hint: Remember
4. As a producer, how would you use the information about elasticity to maximize your revenue?Explain.
7. Given the following data, calculate the average demand and the standard deviation. Period 1 2 3 5 6 7 8 9 10 Total Actual Demand 1700 2100 1900 2200 2000 1800 2100 2300 2100 1800 Deviation Deviation Squared
Consider a town in which only two residents, Hubert and Kate, own wells that produce water safe for drinking. Hubert and Kate can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water. Price Quantity Demanded Total Revenue (Dollars per gallon) (Gallons of water) (Dollars) 3.60 0 0 3.30 35 116 3.00 70 210 2.70 105 284 2.40 140 336 2.10 175 368 1.80 210 378 1.50 245 368 1.20 280 336 0.90 315 284 0.60 350 210 0.30 385 116 0 420 0 Suppose Hubert and Kate form a cartel and behave as a monopolist. The profit-maximizing price is per gallon, and the total output is gallons. As part of their cartel agreement, Hubert and Kate agree to split production equally. Therefore, Hubert's profit is , and Kate's profit is . Suppose that Hubert and Kate have been successfully operating as a cartel. They each charge the monopoly price…