Suppose that the demand and supply schedules for rental apartments in the city of Gotham are as given in the tablebelow.ApartmentsDemandedApartmentsSuppliedMonthly Rent$2,75010,00015,0002,25012,50012,5001,75015,00010,0007,5001,25017,50075020,0005,000 c. Suppose that a new government is elected that wants to keep out the poor. It declares that the minimum rent thatcan be charged is $2,750 per month. If the government can enforce that price floor, will there be a surplus or ashortage?SurplusOf how many units?apartments per monthHow many units will actually be rented each month?apartments

It is mentioned that the government enforces a price floor which can be defined as the lowest legal…

Answered: Suppose that the demand and supply…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1) You run a small company that provides regular pool service to customers in East Dallas. Like your competitors in the pool service business, you provide pool service 4 times per month but invoice customers for service on a monthly basis. When you raised the monthly price of pool service from $125 to $140, you lost 28 customers, leaving you with 90 pools to service. You believe that your demand curve has constant elasticity and has not shifted since you started your business. a. Estimate your elasticity of demand? b. Given the cost of pool chemicals, gas, wear and tear on your truck and your time, you believe that the marginal cost of servicing an additional pool in East Dallas is $75 per month. What can you say about your optimal price? Was it a good idea to increase your price? Over time, you realize that half of your 90 customers appear to be more price sensitive than the other half. You know that your customers communicate with each other and would be unhappy knowing that they are…
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 demand functions for two products are given below. P1, P2, 91, and q2 are the prices (in dollars) and quantities for products 1 and 2. (91 12 = 1200-3p1 - 2p2 ༨༽q 900 4p1-2p2 What is the marginal demand of quantity 1 with respect to price 1? What is the marginal demand of quantity 1 with respect to price 2? What is the marginal demand of quantity 2 with respect to price 17 What is the marginal demand of quantity 2 with respect to price 2? Are these two products complementary goods or substitute goods? Select an answer
What can you say about the price, with and without price discrimination
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Your student film society is looking for an auditorium to use for an all day Hitchcock film program and is willing to pay up to$200. Your college has a new auditorium that has a daily rent of$450, an amount that includes $300 to help pay for the cost of building the auditorium, $50 to help pay for insurance, and $100 to cover the extra costs of electricity and janitorial services for a one-day event. The college should rent the auditorium for A. any amount more than $50. B. no less than $200. C. no less than $150. D. any amount more than $100.
Give an example of how a business implements the law of demand in its pricing structure. How do consumers react as prices are lowered? Is it a linear relationship between price and demand?
Companies often adjust their basic prices to allow for differences in customers, products and locations. Use examples to illustrate the various forms of price adjustment strategies. In your answer, discuss where relevant the advantages and disadvantages of specific price adjustment strategies
4) Provide a real-world example of third-degree price discrimination (with a hyperlink to the example. The page you link to should be in English). Discuss what prevents re-sale in your example (i.e. why can't people who pay a lower price sell the good to people who face a higher price?).
Question 1 Consider ten students who think about rent- ing an inner ring (IR) apartment in College Town. Their reservation prices (in no particular order) are 250, 280, 300, 420, 240, 380, 260, 440, 480, and 400, respec- tively. Suppose the supply of IR apartments is fixed at N = 6, and all landlords have reservation prices of zero. a) Plot an ordered list of the students' RPs in a diagram. b) Plot the (inverse) market demand curve, and the (inverse) market supply curve in a diagram. Explain why your plot in a) is identical (except for the labelling of the vertical axis) to your demand plot in b). c) Find the market equilibrium. How many IR apartments are rented out in a competitive equilibrium? To whom? At which price(s)? Explain.

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