Suppose there are three stores in a shopping center that would benefit from security lights in the parking lot according to the following inverse demand functions:StoreInverse DemandPA = 60 - QPe = 45 - 20Pc = 30 - 20A:B:C:If security lights cost $70 each, in other words market supply is P = 70, what is the efficient quantity of lights?The efficient quantity of lights is(Enter your response rounded to the nearest integer.)

There are three stores in the shopping center A, B and C. The cost of security light is $70 and…

Answered: Suppose there are three stores in a…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Elasticity

Section: Chapter Questions

Problem 10QP

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4. There is no demand for a certain make of one-time use camera when the unit price is $ 12. However, when the unit price is $ 8, the quantity demanded is 8000/week. The supplier will not market any cameras if the unit price is $ 2 or lower. At $ 4/camera, however, the manufacturer will make available 5000 cameras/week. Given that both the supply and demand equations are linear: (a) Determine the associated linear demand function (b) Determine the linear supply function. (c) At what price should the camera be sold so that there is neither a surplus nor a shortage?
Suppose the market for cars has two segments, businesses and home users. The demand curve for cars by businesses is p = 120 - 40qb where q is the quantity of cars demanded by businesses with the price is p. The demand curve for cars by home users is p = 40 - 10gh where q is the quantity of cars demanded by home users when the price is p. Both businesses and home users will never demand negative amounts of cars, so for sufficiently high prices, the demand will be 0. Which of the following figures represent the market demand curve for cars? a. b. C. p 120 110 P 120 110 р 120 110 100 90 100 90 100 90 80 80 80 70 70 70 60 60 60 50 50 50 40 40 40 30 30 30 20 20 20 10 10 10 1 2 3 4 5 6 7 8 9 10 11 12 Q 1 2 3 4 5 6 7 8 9 10 11 12 Q d. p ea p e. 120 120 110 100 90 80 70 60 50 40 30 20 10 10 b C d e 1 2 345 6 7 8 9 10 11 12 Q 110 100 90 80 70 60 50 40 30 20 10 1 2 3 4 5 6 7 8 9 10 11 12 Q 1 2 3 4 5 6 7 8 9 10 11 12 Q
Suppose the demand for bicycles is given byQp = 10,000P- and the supply of bicycles is given by Qs = 0.01P3. (a) Using calculus and the given supply and demand curves, find mathematical expressions for the elasticities of demand and supply as a function of the price. Use these expressions to demonstrate that both curves have constant elasticity along their entire length. (b) Find the equilibrium price and quantity in this market mathematically.
A TV channel has estimated the demand for its service to be given by the following function: Q=9.83p-1.2A2.5Y1.6P0-1.4 where Q = monthly sales in units P = price of the service in $ A = promotional expenditure in $’000 Y = average income of the market in $’000 P0 = price of ‘home movies’ in $ The current price of the TV channel is $60, promotional expenditure is $120,000, average income is $28,000, and the price of ‘homemovies’ is $45. Indicate whether the following statements are true or false, giving your reasons and making the necessary corrections e. ‘Home movies’ are a substitute for the TV channel.f. A 5 per cent increase in income will increase demand by 16 per cent.g. A 10 per cent increase in price will reduce demand by 12 per cent.h. Current sales are over a million units a month. i. The demand curve for the channel is given by:Q=9.83p-1.2j. The channel’s sales are more affected by the price of ‘home movies’ than by the price of its own service.k. If the channel increases its…
a) The demand function for a product is p = 60 3-9/15) where q is the number of units and p is the price of one unit. At what price will the demand be 15 units? How many units will be demanded if the price is $41.60?
Suppose that the inverse demand for San Francisco cable car rides is p = 10 - Q/1,000, where p is the price per ride and Q is the number of rides per day. Suppose the objective of San Francisco's Municipal Authority (the cable car operator) is to maximize its revenues. What is the revenue maximizing price? Suppose that San Francisco calculates that the city's businesses benefit from tourists and residents riding on the city's cable cars at $4 per ride. If the city's objective is to maximize the sum of the cable car revenues and the economic impact, what is the optimal price?
Solve the problem and correct answer
Question #2 Consider the following demand function for frozen dinners where QD is the quantity of frozen dinners demanded per week, P is the price per frozen dinner, PF is the price per fast food meal, Y is the average yearly consumer income, and A is the number of advertisements for frozen dinners. Demand Function for Frozen Dinners: QD = 1,000 – 10P + 20PF – 0.01Y + A Suppose that a frozen dinner sells for $4, a fast food meal sells for $6, average yearly consumer income is $50,000, and that there are 20 advertisements for frozen dinners. Calculate and interpret the income elasticity of demand. Calculate and interpret the cross-price elasticity of demand with respect to fast food meals.
The diagram to the right illustrates a hypothetical demand curve representing the relationship between price (in dollars per unit) and quantity (in 1,000s of units per unit of time). 100- 90- Total revenue is $ (Enter your response as an integer.) 80- 70- 60 60- 50- 40- 30- 20- 10- D 30 0- 10 20 30 40 50 60 70 80 90 100 Quantity (1,000s of units per unit of time) Price (dollars per unit)
You have the following demand function: QD=300-2 P Where the "300" is actually in three parts, an intercept term, an income term (M), and a "price of related good" term (PR) as we've been doing all semester. So, when the demand function is pulled apart, you have this: QD = 40 - 2 P + 2*M + 4*PR And M = 80 and PR = 25. (If you plug in those two numbers you'll see you get exactly the top equation. Now, one of two things could happen: M could increase to 100, or PR could increase to 35. Do the math to answer this question. And remember, I'm asking (below) about the demand curve. Which of the following is correct? Multiple Choice O O The increase in income (M) would shift this demand curve farther to the right than the increase in PR would. The increase in PR would shift this demand curve farther to the right than the increase in income (M) would The two changes would shift the demand curve exactly the same amount None of the above is correct
Question 2. 7. commissioned a study that showed the demand by fans for stadium seats (per playing date) to be P- 22 - 0.2Q, where P is the average price of a ticket and Q represents the number of seats (expressed in thousands). The local stadium seats a maximum of 56,000 per game. Suppose the owner offers you 10% of the revenues. If you can only choose a uniform per-ticket price, what is the maximum amount you can carn per game? (Note: Assume that all seats and all games are the same in this problem.) The owner of a baseball team and local stadium has
DINKS are households with "double income, no kids", and such households are invading your neighbourhood. You decide to take advantage of this influx by starting a gourmet take-away food store. Assume that these DINKS in your neighbourhood are your only potential customers. You know that the price elasticity of demand for your food from DINKS is 0.5, and their income elasticity of demand is 1.5. From the standpoint of the quantity that you sell, explain which of the following changes would concern you most. First, the number of DINKS in your neighbourhood falls by 10 percent. Second, the average income of DINKS falls by 5 percent.

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