The only gas station in a small town sells both regular and premium gasoline. The weekly demand functions for the two gasolines are Qregular = 10,000 - 1,000Pregular +50Ppremium Qpremium = 350+50 Pres Pregular 100Ppremium where quantities are measured in gallons and prices in dollars per gallon. a. Are these products substitutes or complements? O Neither complements nor substitutes, because the quantity of each type of gas demanded is unrelated to the price of the other type of gas. ● Substitutes, because as the price of one type of gas increases, the quantity of the other type of gas demanded increases. O Complements, because as the price of one type of gas increases, the quantity of the other type of gas demanded increases. Substitutes, because as the price of one type of gas increases, the quantity of the other type of gas demanded decreases. O Complements, because as the price of one type of gas increases, the quantity of the other type of gas demanded decreases. b. If the price of regular gas is $3.90 per gallon, its marginal cost is $2.95, and the marginal cost of premium is $3.55, what is the profit- maximizing price of premium gas? Instructions: Round your answer to 2 decimal places. $ 5.31 x

The only gas station in a small town sells both regular and premium gasoline. The weekly demand functions for the two gasolines are Qregular = 10,000 - 1,000Pregular +50Ppremium Qpremium = 350+50 Pres Pregular 100Ppremium where quantities are measured in gallons and prices in dollars per gallon. a. Are these products substitutes or complements? O Neither complements nor substitutes, because the quantity of each type of gas demanded is unrelated to the price of the other type of gas. ● Substitutes, because as the price of one type of gas increases, the quantity of the other type of gas demanded increases. O Complements, because as the price of one type of gas increases, the quantity of the other type of gas demanded increases. Substitutes, because as the price of one type of gas increases, the quantity of the other type of gas demanded decreases. O Complements, because as the price of one type of gas increases, the quantity of the other type of gas demanded decreases. b. If the price of regular gas is $3.90 per gallon, its marginal cost is $2.95, and the marginal cost of premium is $3.55, what is the profit- maximizing price of premium gas? Instructions: Round your answer to 2 decimal places. $ 5.31 x

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Q8 plz help quick!!The aggregate demand for the mushroom pasta for each day is given by q = 200 - 4p, where p is the price of the pasta. If the price is $20, then the price elasticity of demand is 01 O 0.666 O 15 O 0.333
If cheesecake is a normal good, then which of the following could be the value of income elasticity? +0.2 +0.8 +1.5 All the given answers.
Consider some determinants of the price elasticity of demand: • The availability of close substitutes • Whether the good is a necessity or a luxury • How broadly you define the market • The time horizon being considered A good with many close substitutes is likely to have relatively demand, since consumers can easily choose to purchase one of the close substitutes if the price of the good rises. A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand? Chemotherapy for cancer patients O Yacht The price elasticity of demand for a good also depends on how you define the good. Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have demand that falls in between. Categories Most Elastic In Between Least Elastic Pants Clothing…
ECONOMICS LECTURE NOTE 5.1.3 Example Use the table below to answer the questions that follows Commodity x Quantity Commodity y Quantity Marginal utility 60 Average utility 1 30 2 50 2 27 3 35 3. 22 4 15 4. 18 5 5 15 6. 6. 12 iii. Which of the commodities would he pay higher price when 4 units are consumed? Suppose the price of X is 5 and that of Y is 4. How many of the quantity of X and Y should be consumed in order for the consumer to be in iv. equilibrium. If price of X increase to 10 whiles that of Y remains the same, explain how the equilibrium conditions will behave.
Suppose the elasticity of demand for good A is -0.40, and the elasticity of supply for good A is 1.00. If supply were to increase by 10%, what would happen to the price? O It would fall by 7.14%. It would fall by 1.67%. It would fall by 25%. It would fall by 14%. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Solve all please and g give answer to true false question also with reason and get like otherwise dislike. Hand written solutions are strictly prohibited.
Q2 needed
Price $7 | 6. 8. 10 12 14 Quantity What is the price elasticity of demand when the price is $2? O-5 -.5 -2 1. %24
In an effort to curb gun violence, some US cities are implementing gun buyback programs. Localpolice departments will buy back guns from the public, no questions asked. For such programs to beeffective, what must be true about the elasticity of demand and supply? Explain your reasoning withdemand-supply diagrams.
1. Optimal choice of capital Eleanor makes sweaters in her home. Starting with just some knitting needles and yarn, she was able to knit 60 sweaters per year. Now some local stores have expressed interest in her designs and offered to buy her sweaters for $10 each. This makes it worthwhile for her to invest in some capital; in particular, she could produce many more sweaters if she invested in one or more looms, as shown in the following table. Assume that Eleanor's sweater business is a perfectly competitive firm. Complete the following table by calculating the marginal physical product (MPP) of each loom and the marginal revenue product (MRP) of each loom. Quantity of Input (Looms) Output (Sweaters per year) MPP of Each Loom (Sweaters) MRP of Each Loom (Dollars) 0 1 2 3 4 5 60 110 150 184 213 238 50 40 34 29 25 If the rental price of a loom is $270 per year, Eleanor should use 500 400 340 290 250 Suppose the demand for sweaters is very elastic, while the demand for cigarettes is very…
None
Please helo me with this question There are 50 residents that live in a small town in California. Each resident uses electricity and there is one power station that produces electricity for the residents from coal. Each residents' demand for electricity is Q = 10 - 2P and the supply function for the power plant is Q = 150P. For each unit of electricity that the power station produces, there is a corresponding release of pollution that leads to asthma and other health problems for the 50 residents. The marginal damage of each unit of electricity produced, per person, is $.05. a. What is the market equilibrium price and quantity per unit of electricity? b. What is the efficient Pigouvian tax per unit of pollution? c. The government of this small California town decides to impose the efficient Pigouvian per unit tax on the power station. What is the new social optimum price and quantity per unit of electricity? d. What is the government tax revenue? e. What is the gain in total…