Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Chapter B, Problem 10E
To determine
To evaluate the optimal solution to the set of simultaneous equations in I petroleum
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Uver is a ride-sharing service that has become very popular in large cities. In one of these large cities, Uver is trying a new model: selling a bundle of 10
rides per week (instead of charging for each ride). Let y stand for the number of bundles, and suppose the weekly cost of providing a bundle of 10 rides
is given by the following function:
c(y) -10y²+200y+ 500.
Assume all Uver drivers have the same cost function.
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The market for Uver rides in this city is competitive. Suppose there are 158 Uver drivers in the city. If the price of a bundle of rides is
$164, the number of bundles of rides that will be provided is
bundles.
I have seen solutions for this question that include solving by matrices and row reduction. Will both these methods give the same answer?
The cost of controlling carbon dioxide emissions [C(E)] at a firm goes up rapidly as the amount
of emissions (E) increase. Let's assume the relationship is defined by the function below.
C(E)= 5000+ 40E +2E² E20
where E is measured in tonnes per year and C is measured in dollars per year.
a) Determine the Marginal Cost function for controlling carbon dioxide emissions and find
the marginal cost at 50 tonnes of emissions:
b) Determine the Average Cost Function for controlling carbon dioxide emissions and find
the tonnes of emissions at minimum average cost.
c) The government is charging a tax of $270 for every tonne of carbon dioxide emitted. At,
50 tonnes of emissions, is it profitable for the firm to control emissions on its own or pay
the carbon tax?
Chapter B Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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