Suppose that the demand curve for movies for college students is100-Q, = 80 – 1.00p90-and for other town residents is80-Q2 = 20 – 0.25p.70-The town's total demand curve is60-Q=.50-40-30-20-10-0+20406080100120Q, MoviesOCT22tv...MacBook Air80DIIDDF10F1F6F7F8F9P. Price per movie

Given information, Demand function for movies for college students: Q1=89-1.00p And, demand…

Answered: Suppose that the demand curve for…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 10MC

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Suppose the demand equation is: Q = 80 – 1.25p. What is the price elasticity of demand if the price is $40 per unit and output is 30 units? The price elasticity of demand is (Enter a numeric response using a real number rounded to two decimal places.) étv 2 Help Me Solve ie EAV लानग ा ा MacBook Air DI DD 80 esc F9 F10 F4 F5 F6 F7 F8 F3 F1 @ $ % & 1 2 3 4 5 7 8. Q W E T Y P tab H K この * 00 R * : -
Q1. Suppose the government is considering an increase in the toll on a certain stretch of highway from $3 to $4. At present, 1 million cars per week use that highway stretch; after the toll is imposed, the number of cars per week will change according to its price elasticity of demand of -0.8 (this elasticity value is estimated based on the initial-value method). If the marginal cost of highway use is constant (i.e., the supply curve is horizontal) and equal to $3 per car, what is the net annual cost to society attributable to the increase in the toll? (your answer must be rounded off to the nearest million dollars per year, i.e., no decimal places; there are 52 weeks in a year)
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
Viking Publishing House observed that in the recent years books on nature conservation and climate change have been very popular. As a matter of fact, Jane Goodall's latest book, "The Book of Hope: A Survival Guide for an Endangered Planet" has been a best-seller and Viking estimates the following demand curve for the book: P= 150 -Q In this equation, P is the price of the book and Q denotes yearly sales in thousands of books. In other words, 20,000 books would be expressed as Q = 20. Viking estimates that it incurs a cost of $40 for printing and shipping of each book and pays a $10 royalty to Jane Goodall for each book sold. Calculate the profit-maximizing OUTPUT and PRICE for this book. Also, calculate the TOTAL а. PROFITS. Show all calculations. No calculations, no points. b. Viking's CEO, Mr. Brian Tart, receives a yearly bonus from the company based on the size of the total revenue generated by Jane Goodall's book. Mr. Tart believes that his bonus is going to be satisfactory only…
QUESTION 11 The function that relates the inverse of speed (1/S) (i.e., the time in minutes that it takes to travel 1 mile) to traffic (T) on a highway is 1/S = 4 + 0.05T. Demand for traffic (measure as traffic volume per minute) on this road is T=6,880 -– 70.(1/S). a. Find the equilibrium traffic volume in the absence of any congestion tollI. b. Find the marginal cost function for traffic volume, where cost is expressed as travel time per mile in minutes. c. Find the optimal level of traffic volume. d. Find the optimal congestion toll, expressed in minutes. (Imagine that the congestion toll consists of sitting in the "penalty box" for this period of time.)
Question 2. 7. commissioned a study that showed the demand by fans for stadium seats (per playing date) to be P- 22 - 0.2Q, where P is the average price of a ticket and Q represents the number of seats (expressed in thousands). The local stadium seats a maximum of 56,000 per game. Suppose the owner offers you 10% of the revenues. If you can only choose a uniform per-ticket price, what is the maximum amount you can carn per game? (Note: Assume that all seats and all games are the same in this problem.) The owner of a baseball team and local stadium has
2. Luchansky and Monks (2009) estimated that the U.S. demand function for ethanol is Q = p-0.504pg 1.2692.226, where Q is the quantity of ethanol, p is the price of ethanol, pgis the price of gasoline, and v is the number of registered vehicle. What is the elasticity of demand for ethanol.
Suppose the demand (in thousands) for a toaster is given by 100p-2, where p is the price in dollars charged for the toaster.a. If the variable cost of producing a toaster is $10,what price maximizes profit? b. The elasticity of demand is defined as the percentage change in demand created by a 1% change in price. Using a data table, show that the demand for toasters has constant elasticity, that is, the elasticity doesn’t depend on the price. Would this be true if the demand for toasters were linear in price?
12 Jim's Camera shop sells two high-end cameras, the Sky Eagle and Horizon. The demands and selling prices for these two cameras are as follows. Ds = demand for the Sky Eagle Ps= selling price of the Sky Eagle DH = demand for the Horizon PH = selling price of the Horizon = 223 - 0.60P + 0.35PH DH=270+ 0.10P - 0.64PH Revenue Ds The store wishes to determine the selling price that maximizes revenue for these two products. Develop the revenue function R (in terms of Ps and PH only) for these two models, and find the revenue maximizing prices (in dollars). (Round your answers to two decimal places.) Price for Sky Eagle Price for Horizon Optimal revenue R = PS = $| PH = $ R = $
In early 20th century, cars like the Ford Model T started to be mass produced and sold to the public. Although they were still expensive and still a luxury item. The number sold increased throughout the 1910's, and the price dropped. The demand curve for the Model T at this time was about: Q= 2,616,00-8617p+9.427p^2-0.003422p^3 a. If the number sold in 1910 was 19,293 cars what was the elasticity of demand at that time? b. Of tje mumber sold in 1916 was 577,036 cars, what was the elasticity of demand at that time?
Suppose that you are in charge of a toll bridge over the Mississippi River. The demand for bridge crossing Q is given by the following: 2P = 20 - Q a) How many people would cross the bridge if there were no toll? (YOU MUST SHOW YOUR WORK TO RECEIVE CREDIT) b) The toll bridge operator is considering setting up a price of $5.00. At that price, how many people will cross the bridge? (YOU MUST SHOW YOUR WORK TO RECEIVE CREDIT) c) How many people would cross the bridge if the toll is set at $10.00? (YOU MUST SHOW YOUR WORK TO RECEIVE CREDIT)
Analyze the demand function for Toyotas in problem C4, page 82. Please also read “What is a Symbol” located in the folder with this assignment. This function is: QT = 200 -.01PT +.005PM -10PG +.01I +.003A Where: QT = quantity purchased PT = average price of Toyotas PM = average price of Mazdas PG = price of gasoline I = per capita income A = dollars spent annually on advertising Characterize this function by circling all in the following list that are applicable: univariate, bivariate, multivariate, linear, exponential, logarithmic, curvilinear, 1st degree, 3rd degree, additive, multiplicative, linearly homogeneous What is the numerical value of the partial derivative of the function with respect to the price of gasoline (PG) (be sure to also include the + or – sign. Note: I do not want the symbol for this partial derivative)? Write the mathematical symbol representing the coefficient of income (I) (the numerical…

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Suppose that the demand curve for movies for college students is Q, = 80 - 1.00p and for other town residents is Q2 = 20 – 0.25p. %3D The town's total demand curve is Q = ......