The industry elasticity of demand for airline travel is −3 and the elasticity of demand for an individual carrier is −4. What is the Rothschild index for this industry?
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- The inverse demand function in an industry with two firms is given as p = 50 – 2y, where y is the industry demand and p is the price. The firms have different technologies at their production plants with costs given as c(y1) = 10y, and c2[y2) = 14y2, where y = y,+ y2. 1. If the firms merge into one firm and become a monopoly in the industry, what will be the output of the merged firm? Comment on what would happen to the production plants under one ownership. Find the equilibrium price and profit. 2. Compare and comment on the total industry profits in these three market structures. 3. Assuming the firms are Bertrand duopolists, what is likely to happen? Explain verbally (no need to solve the problem).i need in words not handwritten solution pleaseKnoebels Amusement Park in Elysburg, Pennsylvania, charges a lump-sum fee, L, to enter its Crystal Pool. It also charges p per trip down a slide on the pool's water slides. Suppose that 450 teenagers visit the park, each of whom has a demand function of q₁ = 6-p, and that 300 seniors also vist, each of whom has a demand function of q₂ = 5-p. Knoebels's objective is to set L and p so as to maximize its profit given that it has no (non-sunk) cost and must charge both groups the same prices. What are the optimal L and p? The optimal L and p are L=$and p=$. (Enter numeric responses using real numbers rounded to three decimal places.)
- A regional airline is the only carrier on a local air route and must determine the number of flights it will provide per month, and the fare it will charge. The estimated cost – fuel, airport charges, pilots, etc. – per flight is $2,000, and each flight is expected to be full, with 100 passengers. Thus the marginal cost per passenger may be considered to be $20.The estimated demand curve is P = 117 - 0.005Q, where P is the fare in dollars and Q is the number of passengers per month. What is the monthly profit if the airline chooses the profit-maximizing fare and number of flights? (Do not include $ sign in your answer. Round any intermediate calculations to two decimal places and your final answer to the nearlest whole number.)A toy manufacturing from has demand for the product is given by the demand function Q= 500 - 3p. Where P is the price in dollars and q is the quantity sold per year. To sell 200 units, what price should the firm charge.A Park charges $50 for students and $100 for everyone else. If the price elasticity of demand for nonstudents is estimated to be -1.5, what must be the price elasticity of demand for students assuming that the movie theater is charging the optimal third degree discriminated prices?
- A company has established that the relationship between the price for one of its products is approximately p = 88.5 – 0.08D0.75 In addition there is a fixed cost of $45,000 per year and the variable cost to manufacture the product is $45 per unit. What level of demand maximizes the total revenue? Ans. is Blank 1 What level of demand maximizes the total profit for this product? Ans. is Blank 2 Blank 1 Add your answer Blank 2 Add your answerNoneTwo dermatologist practices want to merge. The price elasticity of demand for dermatology services is -0.35. Firm 1 has a volume of 7,500, fixed costs of $70,000, marginal costs of $20, and a market share of 8%. Firm 2 has a volume of 15,600, fixed costs of $65,000, marginal costs of $20, and a market share of 12 percent. The merged firm will have a volume of 21,500, fixed costs of $95,000, marginal costs of $20, and a market share of 20%. What are the total costs, prices, revenues, and profits for each firm and for the merged firm, respectively?
- There are two firms in a market, where quantities are the strategic variable within two periods. In each of the two periods t = 1; 2 the inverse demand function Ptis given by P: (y') = 5-y'. The cost function of firm i is given by C=3+2y, where i=1,2. In the first period firm1 is a protected monopolist. Profits of a firm can be interpreted as the sum of its profits in each period. In order to maximize their profits, firms set quantities. Define the monopoly solution. (i) (ii) Firm1 must choose the same quantity in each period y = yf due to the technological restrictions. Considering ył firm2 thinking to enter in period 2. Define the profit maximizing yi if y is given. (iii) Suppose that firm 2 will enter in the second period. What quantity will firm 1 have? What is the equilibrium P, Q and profit?20. Heathrow Airport Holdings is a private company that operates Heathrow Airport in London. Suppose the company recently commissioned your consulting team to prepare a report on traffic congestion at Heathrow. Your report indicates that Heathrow is more likely to experience significant congestion between July and September than at other times of the year. Based on your estimates, demand is Qd1 = 600 − 0.25P , where Qd1 is quantity demanded for runway time slots between July and September. Demand during the remaining nine months of the year is Qd2 = 220 − 0.1P , where Qd2 is quantity demanded for runway time slots. The additional cost Heathrow Airport Holdings incurs each time one of the 80 different airlines utilizes the runway is £1,100 provided 80 or fewer airplanes use the runway on a given day. When more than 80 airplanes use Heathrow’s runways, the additional cost incurred by the company is £6 billion (the cost of building an additional runway and terminal). Heathrow Airport…In 1983, Motorola accounted for seventy five percent of the mobile phone market. But by 2019, its market share had shrunk to just 2.2%. In 1983, the Motorola launched one of the world’s first commercially available mobile phones—the DynaTAC 8000X. Motorola went on to launch a few more devices over the next few years and quickly became a dominant player in the emerging industry. In the early days of the market, the company’s only serious competitor was Finnish multinational Nokia. By the mid-1990s, other competitors like Sony and Siemens started to gain some solid footing, which chipped away at Motorola’s dominance. In September 1995, the company’s market share was down to 32.1%. By January 1999, Nokia surpassed Motorola as the leading mobile phone manufacturer, accounting for 21.4% of global market share. That put it just slightly ahead of Motorola’s 20.8%. Describe the market for mobile phones in 1983 and illustrate how equilibrium price and quantity determined in this industry and…
