Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 15, Problem 7PA
Subpart (a):
To determine
The consumer surplus and effect of tax.
Subpart (b):
To determine
Calculate the consumer surplus.
Subpart (c):
To determine
Calculate profit.
Subpart (d):
To determine
The consumer surplus.
Subpart (e):
To determine
Favors of admission fee.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Suppose High-Tech Software sells two products-a word-processing package and a spreadsheet package. Suppose that the business community values the word-processing package at $100 per unit and the spreadsheet package at $250 per unit while the university community values the word-processing package at $125 and the spreadsheet at $200. (Assume that the marginal cost of each unit is zero.) a. What are the profit-maximizing price that High-Tech should charge if they sell each product separately and what is the total price of the two goods? b. If High-Tech is able to engage in tying, what is the profit-maximizing price for the two products as a bundle? c. Should this be legal?
Based on market research, a film production company in Ectenian obtains the following information about the demand and production costs of its new DVD:Demand: P = 1,000 – 10QTotal Revenue: TR = 1,000Q – 10Q2Marginal Revenue: MR = 1,000 – 20QMarginal Cost: MC = 100 + 10Qwhere Q indicates the number of copies sold and P is the price in Ectenian dollars.d. Suppose, in addition to the costs above, the director of the film has to be paid. The company is considering four options:i. A flat fee of 2,000 Ectenian dollarsii. 50 percent of the profitsiii. 150 Ectenian dollars per unit soldiv. 50 percent of the revenueFor each option, calculate the profit-maximizing price and quantity. Which, if any, of these compensation schemes would alter the deadweight loss from monopoly? Explain
Q⁶
Chapter 15 Solutions
Principles of Microeconomics (MindTap Course List)
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
Knowledge Booster
Similar questions
- Please explain correctly and clearly.arrow_forwardConsider a city that has a number of hot dog stands operating throughout the downtown area. Suppose that each vendor has a marginal cost of $1.50 per hot dog sold and no fixed cost. Suppose the maximum number of hot dogs that any one vendor can sell is 100 per day. Please enter numbers only, for example, 22 for quantity or 1.20 for price. a) If the price of a hot dog is $2, how many hot dogs does each vendor want to sell? () hot dogs per day b) If the industry is perfectly competitive, will the price remain at $2 for a hot dog? If not, what will the price be? The price will be $() per hot dog. c) If each vendor sells exactly 100 hot dogs a day and the demand for hot dogs from vendors in the city is QD = 4400 - 1200P, how many vendors are there in the long-run equilibrium? There are () vendors in the long run. d) Suppose the city decides to regulate hot dog vendors by issuing permits. If the city issues only 20 permits and if each vendor continues to sell 100 hot dogs a day,…arrow_forwardPromoters of a major college basketball tournament estimate that the demand for tickets by adults is QA = 5,000 - 10P and the demand for tickets by students is QS = 10,000 - 100P. The marginal cost and average total cost of seating an additional spectator is constant, MC = $10, The promoters want to segment the market and charge adults and students different prices. What is the profit maximizing ticket price for students?arrow_forward
- Let's say there is demand in a market. The unit cost of production of the good is fixed and is at level 3. If you had a technology that could reduce this cost to 1, how much would you sell the pantent of the technology you have? (Hint: How much does society spend to get the technology you have?)arrow_forwardAssume the supply curve of the typical taxi cab driver in Chicago is P = 4 + 2Q. Suppose the market price is P = 12. Assume cab drivers, sellers of taxi services the in Chicago are regulated by a municipal authority. The regulatory authority charges the sellers a “license fee” that must be paid in order to obtain a license to operate a cab. What is the maximum license fee the regulators can charge? Use the concept of the “seller’s surplus” to answer the question.arrow_forward1arrow_forward
- Microeconomicsarrow_forwardHow does the optimal price depend on the unit cost of producing a set of clubs?arrow_forwardAllocative efficiency is an economic concept regarding efficiency at the social or societal level. It refers to producing the optimal quantity of some output, the quantity where the marginal benefit to society of one more unit just equals the marginal cost. The rule of profit maximization in a world of perfect competition was for each firm to produce the quantity of output where P = MC, where the price (P) is a measure of how much buyers value the good and the marginal cost (MC) is a measure of what marginal units cost society to produce. A monopolist... Group of answer choices Would try to achieve allocative efficiency to compete with the other firms who own a larger market share. Will prefer to operate where price < average total cost. Has no motivation to operate at an output level where P=MC, once a barrier is in place and no longer has to worry about competition. Will experience greater profits if it sets prices equal to average total cost.arrow_forward
- The market for full fare tickets (F)! Consider the following simplified scenario. Imagine that the Australian national rugby union (for short, Rugby AU) has exclusive rights to organize the games played by the national team. Rugby AU decides that the next match, between the Wallabies and the All Blacks (i.e., the Australian and the New Zeeland national rugby teams), will be hosted at the Marvel Stadium in Melbourne. Rugby AU has no fixed costs for organizing the game, but it must pay a marginal cost MC of $20 per seat to the owners of the Marvel Stadium. Two types of tickets will be sold for the game: concession and full fare. Based on any official document that attests to their age, children and pensioners qualify to purchase concession tickets that offer a discounted price; everyone else pays the full fare. The demand for full-fare tickets is QF(P) = 120 – 2P. 1e. Suppose that the government is looking to tax Rugby AU to raise revenue for building new sport facilities for kids…arrow_forwardCoke and Pepsi dominate the cola market. Suppose that the marginal cost of making cola is $2. Assume also that the demand for cola is given by the following table: Price $8 7 6 5 4 3 2 1 Quantity 5 cans 6 7 8 9 10 11 12 If there were a large number of producers, so that the cola market was competitive, how many bottles of cola would be sold? Type your answer...arrow_forwardYou are running a chocolate factory and need to decide on the price to sell the chocolate as well as the quantity to produce. Demand curve; Q = 8.5 - 0.05 * P. The cost curve is C = 100 + 38Q. The business is a profit maximizer. 1) What is the best price to charge each week? 2) What is the best quantity to make each week? 3) What are the expected profits Is it possible to get this in an excel with equation formulasarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage LearningEconomics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning