Bundle: Principles of Economics, Loose-leaf Version, 8th + LMS Integrated MindTap Economics, 2 terms (12 months) Printed Access Card
8th Edition
ISBN: 9781337607735
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 15, Problem 4PA
Subpart (a):
To determine
Measuringrevenues, costs and profits.
Subpart (b):
To determine
Measuringrevenues, costs and profits.
Subpart (c):
To determine
Measuringrevenues, costs and profits.
Subpart (d):
To determine
Measuringrevenues, costs and profits.
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A company is considering building a bridge across a river. The bridge would cost $2 million to build and nothing to maintain. The following table shows the company's anticipated demand over the lifetime of the bridge:
a. If the company were to build the bridge, what would be its profit-maximizing price?Would that be the efficient level of output? Why or why not?b. If the company is interested in maximizing profit, should it build the bridge? What would be its profit or loss?c. If the government were to build the bridge, what price should it charge?d. Should the government build the bridge? Explain.
A company is considering building a bridge across a river. The bridge would cost $2 million to build and nothing to maintain. The following table shows the company's anticipated demand over the lifetime of the bridge:
Price
Quantity
(Dollars per crossing)
(Thousands of crossings)
8
0
7
100
6
200
5
300
4
400
3
500
2
600
1
700
0
800
If the company were to build the bridge, its profit-maximizing price would be $ ?
, and it ( would or would not)? produce the efficient level of output.
If the company is interested in maximizing profit, it (should , or should not)? build the bridge because profit would be
. (Note: If the company incurs a loss, be sure to enter a negative number for profit.)
If the government were to build the bridge, it should charge a price of $ ?
True or False: The government should build the bridge.
True
or
False
Economics
Use the following information
$6.00
Sell 6 million razors
Variable cost = $3.00
Price elasticity = -3
Linear demand curve
Price for a razor =
Now, suppose the cost to produce a blade is $0.25. if you charge $0.35 for a
blade, a customer buys an average of 100 blades from you. A profit per blade is
$0.10. Assume the price elasticity of demand for blades is -3.
What price should you charge for a razor and for a blade? Choose the nearest
answer choice. (note: blade profit = razor demand x profit per blade x blade
demand)
%3D
Chapter 15 Solutions
Bundle: Principles of Economics, Loose-leaf Version, 8th + LMS Integrated MindTap Economics, 2 terms (12 months) Printed Access Card
Ch. 15.1 - Prob. 1QQCh. 15.2 - Prob. 2QQCh. 15.3 - Prob. 3QQCh. 15.4 - Prob. 4QQCh. 15.5 - Prob. 5QQCh. 15 - Prob. 1CQQCh. 15 - Prob. 2CQQCh. 15 - Prob. 3CQQCh. 15 - Prob. 4CQQCh. 15 - Prob. 5CQQ
Ch. 15 - Prob. 6CQQCh. 15 - Prob. 1QRCh. 15 - Prob. 2QRCh. 15 - Prob. 3QRCh. 15 - Prob. 4QRCh. 15 - Prob. 5QRCh. 15 - Prob. 6QRCh. 15 - Prob. 7QRCh. 15 - Prob. 8QRCh. 15 - Prob. 1PACh. 15 - Prob. 2PACh. 15 - Prob. 3PACh. 15 - Prob. 4PACh. 15 - Prob. 5PACh. 15 - Prob. 6PACh. 15 - Prob. 7PACh. 15 - Prob. 8PACh. 15 - Prob. 9PACh. 15 - Prob. 10PACh. 15 - Prob. 11PACh. 15 - Prob. 12PA
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