Bundle: Microeconomics, 13th + Aplia, 1 Term Printed Access Card
13th Edition
ISBN: 9781337742535
Author: Roger A. Arnold
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 3WNG
To determine
Determine whether the firm in the figure earns profit, if it produces quantity Q3 and charge
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
TotsPoses Inc., a profit-maximizing business, is the only photography business in town that specializes in portraits of small children. George, who owns and runs TotsPoses, expects to encounter an average of eight customers per day, each with a reservation price (shown in the following table). Assume George has no fixed costs, and his cost of producing each portrait is $12.
a. How much should George charge if he must charge a single price to all customer? At this price, how many portraits will George produce each day? What will be his economic profit?
b. How much consumer surplus is generated each day at this price?
c. If George is very experienced and knows the reservation prices of each customer, how many portraits will he produce each day and how much economic profit will he earn?
d. Assume George charges only 2 different prices. He know that customers with reservation prices above $30, will never use coupons and the customers with reservation prices below will always use…
Using the IRAC rule,please answer and discuss the question. John entered into a contract for the sale of his restaurant to Catherine. One of the terms of the contract was that Catherine would not open up a similar business within 20 miles of the location of the restaurant being sold. About a month after the sale John noticed a spanking new restaurants two blocks down the road from his recently purchased business. When he found out that the proprietor of the new restaurant was Catherine, he sued for breach of contract.
Explain the likely outcome based on the laws governing legality.
Assume Standard Oil owns all the refineries in the US. What would be the price it would charge for kerosene in the 1800s, if the demand for kerosene is P=100-5Q and its marginal cost is MC=20.
Chapter 12 Solutions
Bundle: Microeconomics, 13th + Aplia, 1 Term Printed Access Card
Knowledge Booster
Similar questions
- Henry Potter owns the only well in town that produces clean drinking water. He faces the following demand, marginal revenue, and marginal cost curves: Demand: P=60−QP=60−Q Marginal Revenue: MR=60−2QMR=60−2Q Marginal Cost: MC=QMC=Q On the following graph, use the blue line (circle symbol) to graph Mr. Potter's demand curve. Then, use the black line (cross symbol) to graph his marginal revenue (MR) curve. Next, use the orange line (square symbol) to graph his marginal cost (MC) curve. Finally, use the grey point (star symbol) to indicate the profit-maximizing price and quantity. : The profit-maximizing quantity is___units, and the profit-maximizing price is___. Mayor George Bailey, concerned about water consumers, is considering a price ceiling that is 10% below the monopoly price. At this new price, the quantity demanded would be___units. At this quantity, the marginal cost would be___the price. Therefore, the profit-maximizing Mr. Potter___produce…arrow_forwardi need in words not handwritten solution pleasearrow_forwardMany apparel companies expanded into mask production during the pandemic. Now that vaccines are readily available, and places are beginning to drop the mask mandates, these masks are heavily discounted at most retailers, and have been completely discontinued at other retailers. For those firms who are discounting their masks, what must be their estimation of how the price they’re charging relates to AC and AVC? How do fixed costs play into their calculation? At what point would it be more profitable for them to burn the masks than to sell them at a discount?arrow_forward
- I am intrigued by the following article detailing how Nestle agreed to pay Starbucks $7.2B to distribute and sell Starbucks’ packaged coffees and teas around the world. Why would Nestle purposely put its competitors’ brands right next to it in the store, and then pay them for the privilege? Why wouldn’t Starbucks just take care of distributing its own brands rather than go through Nestle? Please explain how this outcome could be profit maximizing for both firmsarrow_forwardPlease type your NUMERICAL answer in the space below. ENTER ONLY THE NUMBER. IF answers are in decimals, please round the number to one decimal point. Winterfell Cable TV pays $100,000 per year to earn exclusive rights to air a premium sports channel. There are two types of subscribers in Winterfell: 3,000 die-hard sports fans who will pay as much as $200 a year for the new channel and 20,000 occasional sports viewers who will pay as much as $25 a year for a subscription to it. a) If Winterfell Cable is unable to price discriminate, what price will it charge and how much are its profits? Price Profits= b) If Winterfell Cable is able to price discriminate, how much will it make in profits? Profits= What is the deadweight loss associated with the nondiscriminating pricing policy compared to the price c) discriminating policy? DWL=arrow_forwardThe mobile phone landscape looks drastically different today than it did three decades ago. In 1983, Motorola accounted for seventy five percent of the mobile phone market. But by 2021, its market share had shrunk to just 2.2%. How did this happen, and how has the mobile industry changed over the last 30 years? In 1983, 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…arrow_forward
- Mathematics for Business and Economics Q1) 3x2 ( 12x3 + 20 )0.5 within the range 6 and 8. Q2) The marginal revenue of a firm is given by the following equation: MR(Q) = 20 + 14Q + 13Q2 Where, Q represents the quantity produced. Also given, the total revenue of the firm, when they produce 5 units of output, is 50, i.e., TR(5) = 50. a)Calculate the firm's total revenue function. What is the value of the constant term in the total revenue function? b)Calculate the total revenue of the firm when the firm produces 7 units of output.arrow_forwardWakanda is a firm that solely supplies vibranium to Marley and Paradis. The demand function of the Marley market is given as QM=110-PM , and the demand function of the Paradis market is QP=30-PP . Wakanda’s total cost in producing vibranium is given as TC=100+10Q , where represents a ton of vibranium. 3. How much is the total cost of production? 4. Assuming that Wakanda can price discriminate between Marley and Paradis market, calculate its total profits.arrow_forwardBased on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD: Demand: P=1,200−10QP=1,200−10Q Total Revenue: TR=1,200Q−10Q2TR=1,200Q−10Q2 Marginal Revenue: MR=1,200−20QMR=1,200−20Q Marginal Cost: MC=300+10QMC=300+10Q where QQ indicates the number of copies sold and PP is the price in Ectenian dollars. Complete the following table by finding the price and quantity that maximize the company's profit and the price and quantity that maximize social welfare. Scenario Price Quantity (Dollars) (DVDs) Maximizes the company's profit Maximizes social welfare The deadweight loss from the monopoly is . Suppose, in addition to the foregoing costs, the director of the film has to be paid. The company is considering four options: I. A flat fee of 2,500 Ectenian dollars II. 50 percent of the profits III. 150 Ectenian dollars…arrow_forward
- The government has announced its plans to license two firms to serve a market whose demand curve is given by P= 72-1Q The technology is such that each can produce any given level of output at zero cost, but once each firm's output is chosen, it cannot be altered. Instructions: Round your answers to the nearest penny (2 decimal places). a. What is the most you would be willing to pay for one of these licenses if you knew you would be able to choose your level of output first (assuming your choice was observable by the rival firm)? Skipped b. How much would your ival be willing to pay for the right to choose second?arrow_forwardTable 17-4 Only two firms, ABC and MNO, sell a particular product. The following table shows the demand curve for their product. Each firm has the same constant marginal cost of $4 and zero fixed cost. Price (Dollars per unit) Quantity Demanded Total Revenue (Units) (Dollars) 14 0 0 13 5 65 12 10 120 11 15 165 10 20 200 9 25 225 8 30 240 7 35 245 6 40 240 5 45 225 4 50 200 3 55 165 2 60 120 1 65 65 0 70 0 Questions: A) How much less do each of these firms earn in the Nash equilibrium than if they jointly maximize profits?arrow_forwardIf a textbook firm is thinking of bundling a 2nd product with their "Chemistry for Students That Are Forced to Take This Course (Otherwise There Is No Way You'd Choose It)" textbook, which of these (according to financial economics theory) would be the best choice to put in the bundle to generate the most profit: a) an inexpensive workbook designed for this textbook, b) an expensive scientific calculator with chemistry functionality built in, or c) a hooded sweatshirt from Old Navy? Justify your answer well. This is an essay question, not multiple choice!arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning