Question 26The economic entity most likely to engage in price gouging isthe manufacturer of the product, such as a Honda generator.a national big-box store, such as Target or Walmart.a local, regular supplier of the product.an individual or business who has a supply of the product somewhere else.a local resident who wants to get rid of his or her own product.

In simple words we can say that price gouging oocurs when the seller generally increases the price…

Answered: The economic entity most likely to…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose an airline sells air tickets to two types of customer – business travelersand vacation travelers. Their estimated demand elasticities are -2.5 and -4.0respectively.Suppose the marginal cost is constant at $240, and the services provided to thetwo types of customer are similar. Calculate the fares the airline should charge on the air tickets sold to therespective types of customers. Show your calculations.
f. When price of Tylenol is $0.50, 1,000 are sold. Suppose the price elasticity of demand is 2 and you want to increase the quantity sold to 1,200. Based on that information, what is the new price you must charge? HINT: Use our formula for elasticity as step 1 and our formula for % change in steps 2 and 3. 3. Listen to the Planet Money podcast, "Pav Patients. Save Money" and answer the following questions
How does market power or monopoly subvert the coordinating function of market prices?
how do sunk costs create a barrier to entry into the market place?
For the Monopolist, Demand is given by, P = 120 - 5Q Total Cost = 480 +20Q – Qty? For the Monopolist, Demand is given by, P = 120 - 5Q Total Cost = 480 +20Q – price? For the Monopolist, Demand is given by, P = 120 - 5Q Total Cost = 480 +20Q – profit? Q=15, Price=45, Profit=25 Q=10, Price=70, Profit=40 Q=5, Price=95, Profit=40 Q=20, Price=20, Profit=30
Space Spider Airline is the only airline in Spiderland. The airline has two majorgroups of passengers – business travelers and vacation travelers. One group of themhas its price elasticity of demand at -1.8 and another group has -3.0 respectively.a. Which group, business travelers or vacation travelers, is more likely havingits price elasticity of demand at -3.0? Briefly explain your answer.b. Which traveler group will be charged a higher fare by Space Spider Airlineunder price discrimination? Suggest THREE practical ways for SpaceSpider Airline to identify this group of passengers. Explain your answersbriefly.
The graph below presents the curves associated with the firm JT Minn.. JT Minn. is a monopolist that produces dishwashers. Move the point on the demand curve to represent the price JT Minn. would charge and the quantity at which they would produce. Price/ Cost (570,$20) (980,$33) Marginal I Revenue I Marginal Cost Demand Quantity
Suppose an airline sells air tickets to two types of customer – business travelersand vacation travelers. Their estimated demand elasticities are -2.5 and -4.0respectively.Suppose the marginal cost is constant at $240, and the services provided to thetwo types of customer are similar.a. Based on the given information, explain with TWO practical reasons whether theairline should charge a higher price on business travelers or vocational travelers.Explain without calculation.
suppose a pharmaceutical company considers increasing the price of insulin tm $125 per vial to $300 per vial. whenthe price was $125, the company sold 100, 000 vials per day. the company knows its price elasticity is .25. calculate thepercentage change in quantity demanded that would result in a price elasticity of .25. show your work
T/F There are alot of firms (seller) in a monopoly market. Justify in detail.
Problem 3 uppose an airline has monopoly over a certain route. The estimated price elasticity of demand for business travelers is E-12, while the price elasticity of demand for leisure travelers is Ey-24. The airline wants to set the prices separately for business and vacation travelers. Economy Firat Class Only i the marginal cost of transporting each passenger is the same, und the airline is able to separate the two groups perfoctly, what is the optimal surcharge (in ) on business travelers? Oor example. fleiture travelers pay 100, and business ravelers pay 200, then the surcharge is 100%) Anvwer b) Suppose that in order to separste business travelen, the airline must offer them slightly better conditions on board (for enample, serve them a meal). As a resul, the marginal cost of flying a basiness traveler is 30% higher than for a leivare traveler. What is the optimal surcharge (in ) on business fravelers in this case? Awwer Now suppose the airline introdaces a Basi Economy fare,…

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