The figure to the right illustrates a restaurant's demand for early-bird meals (D,) and the demand for meals after 6 p.m. (D2) as well as each demand curve's corresponding marginal revenue curve. Assume the restaurant engages in price discrimination by charging different prices for early-bird meals and for meals after 20.00- 18.00- 6 p.m. 16.00- 14.00- 1.) Using the point drawing tool, indicate the profit-maximizing price and quantity for early-bird meals with price discrimination. Label this point "Early-bird." * 12.00- 2.) Using the point drawing tool, indicate the profit-maximizing price and quantity 10.00- for meals after 6 p.m. Label this point "Meals after 6." 8.00- Carefully follow the instructions above, and only draw the required objects. 6.00- 4.00- MC 2.00- MR, MR, D, D2 0.00- 100 200 300 400 500 600 700 800 900 1000 Quantity Price and cost

The figure to the right illustrates a restaurant's demand for early-bird meals (D,) and the demand for meals after 6 p.m. (D2) as well as each demand curve's corresponding marginal revenue curve. Assume the restaurant engages in price discrimination by charging different prices for early-bird meals and for meals after 20.00- 18.00- 6 p.m. 16.00- 14.00- 1.) Using the point drawing tool, indicate the profit-maximizing price and quantity for early-bird meals with price discrimination. Label this point "Early-bird." * 12.00- 2.) Using the point drawing tool, indicate the profit-maximizing price and quantity 10.00- for meals after 6 p.m. Label this point "Meals after 6." 8.00- Carefully follow the instructions above, and only draw the required objects. 6.00- 4.00- MC 2.00- MR, MR, D, D2 0.00- 100 200 300 400 500 600 700 800 900 1000 Quantity Price and cost

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Asim's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Asim initially produced eight trucks, but then decided to increase production to nine trucks. The following graph gives the demand curve faced by Asim's HookNLadder. As the graph shows, in order to sell the additional fire truck, Asim must lower the price from $80,000 to $40,000 per truck. Notice that Asim gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial eight engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial eight engines by selling at $40,000 rather than $80,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $40,000. PRICE (Thousands of dollars per fire engine) 220 Asim 200 180 160 140 120 100 80 60 40 20 0 0 1 True 2 False 4 5…
[Suppose] A Cmpany is the sole provider of electricity in the various districts of Dubai. To meet the monthly demand for electricity in these districts, which is given by the inverse demand function: P = 1,200 − 4Q, the company has set up two electric generating facilities: Q1 kilowatts are produced at facility 1 and Q2 kilowatts are produced at facility 2; where Q = Q1 + Q2. The costs of producing electricity at each facility are given by C1(Q1) = 8,000 + 6Q1 C2(Q2) = 6,000 + 3Q2 + 5Q22 Calculate the profit maximizing output levels of each factory? What is the profit maximizing level of price? What is the maximum profit?
Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Jabari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $160,000 to $120,000 per truck. Notice that Jabari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial five engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial five engines by selling at $120,000 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $120,000. PRICE (Thousands of dollars per fire engine) 220 200 180 160 140 120 100 80 60 40 0 Jabari 0 + 1 True…
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Now, suppose that Barefeet can practice perfect price discrimination that is, it knows each consumer's willingness to pay for each pair of Ooh boots and is able to charge each consumer that amount. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing quantity sold and the lowest price at which the firm sells its boots. Next, use the purple points (diamond symbol) to shade the profit, the green points (triangle symbol) to shade the consumer surplus, and the black points (plus symbol) to shade the deadweight loss in this market with perfect price discrimination. (Note: If you decide that consumer surplus, profit, or deadweight loss equals zero, indicate this by leaving that element in its original position on the palette.) PRICE (Dollars per pair of Och boots) 100 90 80 70 60 50 40 30 20 10 0 0 20 MC = ATC Demand 40 60 80 100 120 140 160 180 200 QUANTITY (Pairs of Ooh boots) Monopoly Outcome Profit A Consumer Surplus Deadweight Loss Consider the…
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…
Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Jabari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $160,000 to $120,000 per truck. Notice that Jabari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial five engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial five engines by selling at $120,000 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $120,000. PRICE (Thousands of dollars per fire engine) 220 200 180 160 140 120 100 80 60 40 20 Jabari 0 0 1 2 3…
am. 114.