Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 6, Problem 2SPPA
To determine
To explain:
The reason for restaurants can have a different reservation policy and the reason for using an efficient allocation method.
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#8
Use the figure below to answer the following questions.
Price (dollars per DVD rental)
7.00
6.00
5.00
4.00
3.50
3
5
S = MC
7 9
Rentals (per hour)
Figure 5.2.6
Your grandparents, who prefer to watch movies on DVD
rather than stream them, rent DVDs from Old-Fashioned
Movie Rental. Figure 5.2.6 shows Old-Fashioned
Movie Rental's supply curve of DVD rentals. If the firm
rents the fifth DVD at a price of $7, what is the producer
surplus on that rental?
OA. $28
OB. $1
O C. $7
O D. $3
OE. $6
Imagine you are bundling popcorn, soda and candy for AMC Theaters. You
have the following data on your customers. Assume 1 of each customer type.
For simplicity, assume the price of each good is zero (so really maximizing
revenue).
Customer Type 1
Customer Type 2
Customer Type 3
Popcorn
$6
$5
$7
Candy
$7
$6
$5
Soda
$5
$7
$6
(a) If you had to sell each product separately, what would you price them at to
maximize profits?
(b) If you had an option to bundle the 3 products together (a pure bundle
option instead of selling separately), what would you price the bundle at?
(c) How much would this increase or decrease profits by?
Chapter 6 Solutions
Foundations of Economics (8th Edition)
Ch. 6 - Prob. 1SPPACh. 6 - Prob. 2SPPACh. 6 - Prob. 3SPPACh. 6 - Prob. 4SPPACh. 6 - Prob. 5SPPACh. 6 - Prob. 6SPPACh. 6 - Prob. 7SPPACh. 6 - Prob. 8SPPACh. 6 - Prob. 9SPPACh. 6 - Prob. 10SPPA
Ch. 6 - Prob. 11SPPACh. 6 - Prob. 12SPPACh. 6 - Prob. 1IAPACh. 6 - Prob. 2IAPACh. 6 - Prob. 3IAPACh. 6 - Prob. 4IAPACh. 6 - Prob. 5IAPACh. 6 - Prob. 6IAPACh. 6 - Prob. 7IAPACh. 6 - Prob. 8IAPACh. 6 - Prob. 9IAPACh. 6 - Prob. 1MCQCh. 6 - Prob. 2MCQCh. 6 - Prob. 3MCQCh. 6 - Prob. 4MCQCh. 6 - Prob. 5MCQCh. 6 - Prob. 6MCQCh. 6 - Prob. 7MCQ
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