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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: Q=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, 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-cost curve. Coets 2400 2200 2000 1800 1600 1400 1200 1000 800 600 400 200 0 0 1 456 78 9 10 11 12 Visits (Thousands) Average Total Cost What kind of market would describe the museum? Natural monopoly Perfectly competitive market Single-price monopoly Under this system, each person would visit the museum would be $ minus the new tax.) Marginal Cost The mayor proposes financing the museum with a lump-sum tax of $24 and then opening the museum to the public for free. times. The benefit each person would get from . (Hint: You can measure the benefit as consumer surplus 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 $ . (Hint: Find the number of visits and museum profits for prices of $2, $3, $4, and $5.) At this price, each resident's consumer surplus is $

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: Q=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, 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-cost curve. Coets 2400 2200 2000 1800 1600 1400 1200 1000 800 600 400 200 0 0 1 456 78 9 10 11 12 Visits (Thousands) Average Total Cost What kind of market would describe the museum? Natural monopoly Perfectly competitive market Single-price monopoly Under this system, each person would visit the museum would be $ minus the new tax.) Marginal Cost The mayor proposes financing the museum with a lump-sum tax of $24 and then opening the museum to the public for free. times. The benefit each person would get from . (Hint: You can measure the benefit as consumer surplus 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 $ . (Hint: Find the number of visits and museum profits for prices of $2, $3, $4, and $5.) At this price, each resident's consumer surplus is $

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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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: 0₁-11-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, 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-cost curve. 2400 2200 2000 1800 1800 ACCO 1600 1400 1400 1200 1000 800 600 400 200 0 0 1 2 3 4 5 6 7 89 10 11 12 Visits (Thousands) What kind of market would describe the museum? Natural monopoly Perfectly competitive market Single-price monopoly A Average Total Cast Under this system, each person would visit the museum would be $ minus the new tax.) Marginal Cost (?) The mayor proposes financing the museum with a lump-sum tax of $24 and then opening the museum to the public for free. times. The benefit each person would get from . (Hint: You can measure the benefit as consumer surplus 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 $ . (Hint: Find the number of visits and museum profits for prices of $2, $3, $4, and $5.) At this price, each resident's consumer surplus is $ Which of the following statements are true? Check all that apply. 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.
Transcribed Image Text: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: 0₁-11-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, 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-cost curve. 2400 2200 2000 1800 1800 ACCO 1600 1400 1400 1200 1000 800 600 400 200 0 0 1 2 3 4 5 6 7 89 10 11 12 Visits (Thousands) What kind of market would describe the museum? Natural monopoly Perfectly competitive market Single-price monopoly A Average Total Cast Under this system, each person would visit the museum would be $ minus the new tax.) Marginal Cost (?) The mayor proposes financing the museum with a lump-sum tax of $24 and then opening the museum to the public for free. times. The benefit each person would get from . (Hint: You can measure the benefit as consumer surplus 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 $ . (Hint: Find the number of visits and museum profits for prices of $2, $3, $4, and $5.) At this price, each resident's consumer surplus is $ Which of the following statements are true? Check all that apply. 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.
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