Question 3 A local tailor has two types of customers, private customers and department stores. The market of private customers has a demand given by Qp = 2000 - 100P, and the market of department stores has a demand given by Qs = 4000 - 100P. The marginal cost of one more alteration is constant and equal to zero. (a) Suppose that the tailor can charge different prices to each type of customer. What are the optimal prices? What is the total profit? (b) What is the value of each demand's elasticity at the optimal price level? (c) What is the total consumer surplus (for both groups)? (d) Suppose that a regulation prohibits price discrimination. What is the optimal (uniform) price when the markets are combined? How much does the regulation cost the tailor in terms of forgone profits? What happens to consumer surplus?

Question 3 A local tailor has two types of customers, private customers and department stores. The market of private customers has a demand given by Qp = 2000 - 100P, and the market of department stores has a demand given by Qs = 4000 - 100P. The marginal cost of one more alteration is constant and equal to zero. (a) Suppose that the tailor can charge different prices to each type of customer. What are the optimal prices? What is the total profit? (b) What is the value of each demand's elasticity at the optimal price level? (c) What is the total consumer surplus (for both groups)? (d) Suppose that a regulation prohibits price discrimination. What is the optimal (uniform) price when the markets are combined? How much does the regulation cost the tailor in terms of forgone profits? What happens to consumer surplus?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: ew « Tips Tips 300 History BIL COO > zm W Bookmarks Profiles Tab CENGAGE MINDTAP 37,027 3 PRICE…

A: The seller's minimum willingness to sell for the second unit is $2.00.The producer surplus for the…

Q: This does not solve for the Present Worth of Costs

A: Two design alternatives: 1) Steel Girder 2) Concrete Girder Initial cost of Steel Girder = $2.25…

Q: Define the term engineering economic decisions?

A: Engineering economics is the Application of economic principle in the analysis of decision making in…

Q: For Part A, could you format it in a different way thats easier to read. I can't follow what the…

A: Price elasticity of demand for a good is estimated to know about the changes in the quantity…

Q: hy is it important for managers to avoid confusing incremental costs with average costs?

A: Incremental Cost :- The incremental cost represents the cumulative amount of money spent on an extra…

Q: The cost, in dollars, of producing x yards of a certain fabric is C(x) = 900 + 12x-0.1x² + 0.0005x³…

A: Cost: Cost refers to the expenses or expenditures incurred by a business or individual to produce…

Q: Ace Shoe Company sells heel replacement kits for men's shoes. It has fixed costs of $10 million and…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: Need High quality answers

A: In financial planning, it's important to recognize that it applies to various sectors, not just…

Q: \table[[\table[[Output], [per], [Month]], Price, \table[[Total], [Revenue]], Total Cost,Total…

A: a. The market price refers to the current price at which a good or service is traded in the…

Q: Please do not give solution in image format thanku Calculate the TEV for a standard 1-day car…

A: Fuel cost for universal car: (2 hundred miles / 25 miles/gallon) * $4/gallon = $32Fuel cost for…

Q: For a table manufacturing company, selling price for a table is $188.00 per Unit, Variable cost is…

A: Here we have to calculate the point where the company will be indifferent between the current mode…

Q: A company produces a single, high-volume product. One year its production volume was 780,000 units,…

A: The objective of the question is to calculate the average cost per unit produced by the company. The…

Q: Describe the four principles of engineering economics?

A: Principle 1: A close by penny is worth a distant dollar A fundamental concept in engineering…

Q: BridgeCo manufactures ar used struc standard size caseloads for a price of $4000. BridgeCo's fixed…

A: Price=$4000 Fixed Cost=$20,000 Variable Cost=$2000 (a) Total Revenue= Price*Quantity TR=4000*Q…

Q: Describe three best practices to observe when producing a WBS?

A: Work breakdown structure (WBS) : In order to do a program in an efficient manner , the project can…

Question

Please explain how to do part D and E only

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Identify a minimum of 5 features/tools that are offered.
Hi, what is the Average and Marginal Costs per RVU for the below scenario? 1. Calculate the costs 2. Show your calculations Scenario: Assume that during the FY2016 year, Camden Health LLC historical costs were $750,000 when 11,000 RVUS were produced and $950,000 when 14,000 RVUS were produced. The contract specifies that the number of RVUS per service CPT code are five (5). High Total Fixed Costs #RVUS high point Low Total Fixed Costs #RVUS low point #RVUS per CPT Projected #RVUS for the coming month $950,000 14,000 $750,000 11,000 5 10,000
What solution did Malthus propose for the problems heidentified?
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
Bernardo Beefmaster has 50 cull cows that average 1100 Ibs and he purchased them for $60/cwt. He fed the cows for 55 days and sold them at 1260 Ibs for $65/cwt. The cows averaged about 30 lbs of feed per day, and cost $7/cwt. Calculate the average daily gain, feed efficiency (feed:gain), feed only cost of gain, breakeven per pound and total, and the total margin. WHAT IS THE BREAKEVEN VALUE PER POUND?
Answer correctly please. Don't do wrong. I ll rate
what are the numbers that go in the cost table A through L Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Bags/Participants Fixed Cost Variable Cost Total Cost 0 $1,700 $ - $1,700 100 $1,700 $500 $2,200 200 $1,700 $1,200 $2,900 300 $1,700 $2,700 $4,400 400 $1,700 $5,200 $6,900 500 $1,700 $9,000 $10,700 600 $1,700 $15,000 $16,700 700 $1,700 $23,800 $25,500 800 $1,700 $36,800 $38,500 900 $1,700 $55,800 $57,500 1,000 $1,700 $83,000 $84,700 Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? At what quantity of bags will profits be maximized? A Use the profit maximizing rule, MR ≥ MC, buy 300 bags. B Use the profit maximizing rule, MR ≥ MC, buy 200 bags. C Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 300. D Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 200.
what is Operational definition Repeat Purchase for food customer?
Evaluate the costs and benefits associated with achieving ISO 9000/9001 certification status for a specific product- or service-based company.