You own a fast food restaurant and must decide on a pricing strategy for burgers and fries. The market you serve contains equal numbers of 3 types of consumers called "Average", "Burger Buffs", and "Fries Fiends". Each consumer will purchase at most 1 of each food type. Their valuations of the two goods are listed in the following table. Assume for this problem that the costs of production are zero. a. Consumer Valuations Consumer Types Average Burger Buffs Fries Fiends Burgers $5.33 $12 $3 Fries $8 $3 $11 What are the optimal (separate) prices for burgers and fries?

You own a fast food restaurant and must decide on a pricing strategy for burgers and fries. The market you serve contains equal numbers of 3 types of consumers called "Average", "Burger Buffs", and "Fries Fiends". Each consumer will purchase at most 1 of each food type. Their valuations of the two goods are listed in the following table. Assume for this problem that the costs of production are zero. a. Consumer Valuations Consumer Types Average Burger Buffs Fries Fiends Burgers $5.33 $12 $3 Fries $8 $3 $11 What are the optimal (separate) prices for burgers and fries?

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

1 Use the equations given below and calculate total benefit, total cost, marginal benefit, and marginal cost for values of Q ranging from 35 to 45 Total Benefits: P = 314Q – 16Q Marginal Benefits: P = 314 – 32Q Total Cost: P = 50Q + 17Q Marginal Cost: P = 50 + 34Q 1) Graph total benefit and total cost on one graph, and marginal benefit and marginal cost on the other graph 2) Find the optimal value of Q and P 3) Calculate the total benefit, total cost, and net benefit at the equilibrium
Suppose Mr. Mohammed, a seller in the Fruit & Vegetable Market in Al-Aweer, suddenlyrealized that his marginal cost was above the market price of the output. How would he reactif he were a profit maximizer? Analyze.
1. Bob needs to decide whether to go home or go to the library. At home, his menu is H = {a,b,c} where a is study, b is watch TV, and c is surf the Internet. In the library, his menu is L = {a,c}. Let u(a) = 10, u(b) = 0, u(c) = 2 and v(a) = 0, v(b) = 8 and v(c) = 4. Then the multi-self model implies that (A) Bob will go to the library and surf the Internet there; (B) Bob will go to the library and study there; (C) Bob will go home and study; (D) Bob will go home and watch TV. 2. The costly self-control model implies that (A) Bob will go to the library and surf the Internet there; (B) Bob will go to the library and study there; (C) Bob will go home and study; (D) Bob will go home and watch TV.
Suppose there are two firms selling protein bars. Firm 1 sells 'AggieBars' with 10 grams of protein and firm 2 sells 'DavisBars' with 20 grams of protein. Consumers are distributed uniformly over their preferences for grams of protein between 10 and 20. Suppose firm 1 sells AggieBars for $2 and firm 2 sells DavisBars for $3. The 'cost to consumers of deviating from their optimal amount of protein is $0.20 per gram. a. What protein content does the marginal consumer (the consumer who is indifferent between AggieBars and DavisBars) prefer? The equation for finding the marginal consumer (when the range of product attribute values is 10) is V - p1 - tx m = V – p2 – t(10 – x m) 4 b. How would the proportion of consumers buying each product change if the cost to deviation from one's optimal amount of protein increased (was greater than $0.20 per gram)?
Crystal is a talented artist who sells hand-crafted goods on her website. Crystal currently crafts and sells both tea towels and baskets. She spends 8 hours a day working on crafts. The following table gives different daily output scenarios depending on how much of her time is spent on each good. BASKETS Choice (Tea towels) A B C D E 30 25 20 15 10 5 Hours Crafting 0 0 8 6 4 2 0 On the following graph, use the blue points (circle symbol) to plot Crystal's initial production possibilities frontier (PPF). 2 (Baskets) (Tea towels) 0 2 4 6 8 3 4 TEA TOWELS 5 4 3 6 2 1 0 Produced 7 (Baskets) 0 10 16 19 8 20 Initial PPF New PPF
Ch 26 Economics When different firms charge different prices the ……………. price prevails.
The local diner offers a meal combination consisting of an appetizer, a soup, a main course, and a dessert. There are 4 appetizers, 5 soups, 5 main courses, and 4 desserts. Your diet restricts you to choosing between a dessert and an appetizer. (You cannot have both.) Given this restriction, how many three-course meals are possible? --------------------------------------choices
Consider a society consisting of just a farmer and a tailor. The farmer has 30 units of food but no clothing. The tailor has 60 units of clothing but no food. Suppose each has the utility function U=Fc, If the price of clothing is always $1, and the food price is currently $1, then we can conclude O the market is at a competitive equilibrium. the price of food will drop towards a contitive equilibrium. the price of food will increase towards a competitive equilibrium. O None of the above..
7. The best alternative foregone for any choice is known as the associated cost consumer's marginal utility resource input cost explicit cost opportunity cost 9. 9. Below is the total benefit Kenneth estimates he would get for jars of chocolate-flavored hazelnut butter. Jars Total Benefit (dollars) 1 5 2 9 3 12 4 14 5 15 6 14 7 10 What is Kenneth's optimal quantity consumed if the price of each jar is $4? 1 2 4 5 7
7. Problems and Applications Q7 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: QD = 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. Costs 2400 2200 2000 1800 1600 1400 1200 1000 800 600 400 200 0 + 0 1 + + 2 3 + 5 6 Visits (Thousands) + 4 + 8 7 + 9 + 10 + 11 12 = Marginal Cost Average Total Cost ?
Consider the table, which shows five possible choices of output combinations for Rock's restaurant. What is the opportunity cost of changing from Choice A to Choice D? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b с MC5 d e 6 Pizzas 8 Pizzas 11 Salads 9 Salads Can't be calculated Choice ABCDE Number of Pizzas 2 4 6 8 10 Number of Salads 20 18 15 11 6
The figure shows the demand curve for pizza. A) What is the 4 point marginal benefit of pizza number 20? B) What is the maximum price that the consumer wants to pay for pizza number 20? C) If the price of a pizza is $6, what is the consumer surplus for the 20th pizza? d) If the price of a pizza is $10, what is the consumer surplus? e) If the price of a pizza is $6, what is the consumer surplus?