The residents of the town Ectenia all love economics, and the mayor proposes building an economics museum. The museum has a fixed cost of$2,400,000 and no variable costs. There are 100,000 town residents, and each has the same demand for museum visits: Qp = 11-P, where P is theprice of admission.On the following graph, use green points (triangle symbol) to graph the museum's average-total-cost curve at the following quantities: 1,000 visits,2,000 visits, 3,000 visits, 4,000 visits, 6,000 visits, and 12,000 visits. Then use the orange line (square symbol) to graph the museum's marginal-costcurve.24002200200018001600140012001000800600400200 +0012345 67Visits (Thousands)891011 12Average Total Cost0-Marginal Cost? What kind of market would describe the museum?Natural monopolyPerfectly competitive marketSingle-price monopolyThe mayor proposes financing the museum with a lump-sum tax of $24 and then opening the museum to the public for free.Under this system, each person would visit [times. The benefit each person would get from the museum would be $can measure the benefit as consumer surplus minus the new tax.)The mayor's anti-tax opponent says the museum should finance itself by charging an admission fee.The lowest price the museum can charge without incurring losses is S$3, $4, and $5.) At this price, each resident's consumer surplus is SWhich of the following statements are true? Check all that apply.(Hint: You(Hint: Find the number of visits and museum profits for prices of $2,Consumers are worse off with the admission fee than under the mayor's plan.Revenue per person is the same regardless of whether an admission fee or the mayor's plan is used.Total societal welfare is better with the admission fee than under the mayor's plan.

Demand = 11 - PVariable Cost = 0Fixed Cost = $2,400,000As per our guidelines, we are supposed to…

The residents of the town Ectenia all love economics, and the mayor proposes building an economics museum. The museum has a fixed cost of $2,400,000 and no variable costs. There are 100,000 town residents, and each has the same demand for museum visits: Qp = 11-P, where P is the price of admission. On the following graph, use green points (triangle symbol) to graph the museum's average-total-cost curve at the following quantities: 1,000 visits, 000 visits, 3,000 visits, 4,000 visits, 6,000 visits, and 12,000 visits. Then use the orange line (square symbol) to graph the museum's marginal-cost surve. 2400 2200 2000 1800 1600 1400 1200 1000 800 600 400 200 0 0 1 2 3 5 67 Visits (Thousands) 4 8 9 10 11 12 Average Total Cost 11 Marginal Cost

The residents of the town Ectenia all love economics, and the mayor proposes building an economics museum. The museum has a fixed cost of $2,400,000 and no variable costs. There are 100,000 town residents, and each has the same demand for museum visits: Qp = 11-P, where P is the price of admission. On the following graph, use green points (triangle symbol) to graph the museum's average-total-cost curve at the following quantities: 1,000 visits, 000 visits, 3,000 visits, 4,000 visits, 6,000 visits, and 12,000 visits. Then use the orange line (square symbol) to graph the museum's marginal-cost surve. 2400 2200 2000 1800 1600 1400 1200 1000 800 600 400 200 0 0 1 2 3 5 67 Visits (Thousands) 4 8 9 10 11 12 Average Total Cost 11 Marginal 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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