You just got a patent for the first commercial self-driving car. The following table show the elasticity of the demand and the marginal cost of production of your cars in severa production centers across the globe. Assuming that this are constant, can you approximat what would be the optimal price for your cars? City Marginal Cost Elasticity Price Wolfburg, Germany Barcelona, Spain Tokyo, Japan Ulsan, South Korea East London, South Africa Mexico City, Mexico $20, 000 $18, 000 $22, 000 $16, 000 $10, 000 $12, 000 $60, 000.00 $24, 000.00 $33, 000.00 $32,000.00 $11, 428.60 $14, 400.00 -1.5 -4.0 -3.0 -2.0 -8.0 -6.0
Q: Q9.CASE STUDY: Aura Healthy Drinks company private limited concludes that the demand function for…
A: We are going to answer this question with the help of substitution method.
Q: exclusive Yoghurt manufacturer sells 4,000 gallons per month at a price of GHS 40 each. When the…
A: Answer a. The elasticity of demand =(change in quantity/average quantity)(change in price/average…
Q: Apple normally sells 300 million ipods @ $150 each. Its variable cost is $35 each. The price…
A: As the question has multiple questions, we would be answering the first one only. Please resubmit…
Q: Can you think of an industry (or product) with near infinite elasticity of supply in the short term?…
A: The response of a good or service's supply to a change in its market price is measured by its price…
Q: The manager of the Sell-Rite drug store accidentally mismarked a shipment of 20- pound bags of…
A: Price elasticity of demand measures the responsiveness of quantity demanded to a change in price.…
Q: of margarets banana cake is 5. If the aggregate market for banana cake has own price of elasticity…
A: Given Information Price elasticity of Margarets banana cake = 5The Aggregate market for banana cake…
Q: A movie theater company obtains the following estimated elasticities of demand. The absolute value…
A: * SOLUTION :- Given that ,
Q: Suppose the supply and demand curves for a particular product are given by: QS = -20 + 2P , QD…
A: Price elasticity of demand measures the responsiveness in quantity demanded of a commodity to a…
Q: You manage a movie theater that can handle up to 8,000 patrons per week. The current demand, price,…
A: Demand and supply are the two major market forces. All the decisions are taken according to the…
Q: A firm’s production function is Q = 600*L -1.0*L2. The firm is currently employing 83 units of…
A: Given:Q=600L*1L2Now,Slope of Q=dQdLSlope of Q=600-2L L=83Thus,Slope of Q=600-2(83)Slope of…
Q: Q1. Calculate the Income Elasticity of Demand (IED) and explain whether hotels are normal or…
A: a) Income elasticity of demand is the percentage change in the quantity demanded as response to a…
Q: The total revenue function of a good is given by TR=100 Q - Q2 If the current demand is 40. The…
A: Total revenue is defined as the money generated from the sale of the good which is calculated as the…
Q: The demand and supply equations for product A are given by the following equations: ? = 40 − 5? ? =…
A:
Q: The demand curve for product a is given as Q = 2000 - 20P. What will be the total revenue at a…
A: Note: Since you have posted question with multiple sub-parts, we will solve the first the first…
Q: Bloomington's, Inc. is a retailer of distinctive clothing. At the end of the company's fiscal year,…
A: While calculating arc advertising elasticity of demand, those consecutive months are to consider in…
Q: Suppose a producer can manufacture her smartphones at a constant marginal cost of $300. She…
A: According to the Rule of thumb for pricing with an "incremental margin percentage" Incremental…
Q: A firm faces a perfectly elastic demand curve and the market price is equal to $25. This firm…
A: There are large number of firms selling identical goods in perfect competition.
Q: ) if the supply curve for orange juice is estimated to be Q =40+2p , then , at a price elasticity of…
A: Given Information Q = 40 + 2p Let say p = 2 Then the Q = 40 + 2 x 2 = 44
Q: Jim's Camera shop sells two high-end cameras, the Sky Eagle and Horizon. The demands for these two…
A: We are going to execute two-variable maximisation process to answer this question.
Q: Where will profits be higher: When demand for a patented drug is highly inelastic or when demand for…
A: Elasticity is an economic idea being employed calculates the improvement in the entire quantities…
Q: Assume that the price of product Y decreases by 5% and the quantity supplied decreases by 2%. The…
A: The markets are the places which are considered to be the meeting point of the buyers, who want to…
Q: Suppose that a firm is selling a good with a marginal cost of $35. Management estimates demand…
A:
Q: Q1: Analytical part - 8% Best Orange Juice Company is located in Oman. The cost function for total…
A: MC = dC(q)/Dx = 0.5x = 0.5xm + 0.5xs
Q: The demand function for a certain model of Blu-ray player is given by 300 p = 0.5x + 1 where p is…
A: Consumer surplus is the area below the demand curve and above the market price.
Q: The Potomac Range Corporation manufactures a line of microwave ovens costing $500 each. Its sales…
A: The cross-elasticity measures the % change in quantity demanded of good x due to the % change in the…
Q: George has been selling 8,000 T-shirts per month for $8.00. When he increased the price to $9.00, he…
A: Price elasticity of demand measures the responsiveness of the quantity demanded of a good or service…
Q: Q9.CASE STUDY: Aura Healthy Drinks company private limited concludes that the demand function for…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: functions are given as below Q_1=1200-10P_1 Q_2=800-10P_2 Where Q_1 is the domestic quantity: Q_2 is…
A: Demand function of the firm:- Q1=1200-10P1Q2=800-10P2Total cost function=0.05Q2+10000 Where; Q1 is…
Q: A friend of mine is an artist. She mostly paints landscape pictures. They take a bit of time, but…
A: Unit cost of painting means Average cost of painting or Minimum of ATC . ATC = Cost / q
Q: Compare Elixir’s profit maximizing price with the marginal cost of producing the profit-maximizing…
A: We are going to use profit maximising conditions to solve this question.
Q: When the goods produced on a small scale, they have a) Highly elastic supply b) Relatively inelastic…
A: Meaning of Elasticity of Supply: The term elasticity of supply refers to the situation under…
Q: The demand for monorail service on the Utarek monorail, which links the three urbynes (or districts)…
A: Given that The demand function for monorail service is q(p) = 5.5 + 50/p. Where 3 ≤ p ≤ 8 (a)…
Q: 8.2. The demand for Firm A is said to be elastic. Do you agree with this statement? Justify your…
A: Price elasticity of demand is the change in the quantity demanded of a good in response to the…
Q: Mercedes-Benz S-Class is the number one luxury car in the world. You expect the demand for this…
A: The elasticity of demand measures the responsiveness of percentage change in quantity demanded due…
Q: Suppose that an increase in the price of melons from $1.30 to $1.80 per pound increases the quantity…
A: Price elasticity of supply, Es= [(Q2 -Q1)/(Q2 + Q1) /2]÷(P2 - P1) /P2 + P1)/2
Q: Blue Co. makes a processor that requires a metal that can only be found in a single mine in Peru. Do…
A: Price elasticity of supply: The price elasticity of supply is a metric that measures how responsive…
Q: If the price elasticity is -3 and RM 100 is the marginal cost of product X, what should be the…
A: P-MCP=1ε where P = Price MC = Marginal cost ε = Elasticity
Q: Which would result in a decrease in the elasticity of demand for a particular resource? Multiple…
A: Elasticity represents how much the quantity demanded is responsive towards any change in the price.…
Q: Draw a non-linear supply curve which is elastic at lower price levels, unit elastic at moderate…
A: The supply function expresses the units of a commodity that the producers are willingly to…
Q: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per…
A: Defination: Price elasticity of demand is an estimation of the adjustment of the utilization of an…
Q: Explain the demand, income, cross-price and supply elasticity for five (5) types of building…
A: In general, the concept of normal construction can be described as the procedure of making the…
Q: XYZ Co. makes a processor that requires a metal that can only be found in a single mine in Peru. Do…
A: Answer:
Q: Reid has determined that the daily demand for doughnuts at his favorite bakery is described by the…
A: Price elasticity of demand refers to changes in quantity demanded in response to changes in price.…
Q: The equation for total revenue for a particular product when Q items are produced is: TR = -11x2 +…
A: The elasticity is the ratio of the percentage change in quantity demanded because of the percentage…
Q: If the price of Zumba class increases by 20%, while the quantity demanded for Zumba decreased by…
A: The elasticity of (Ed) demand measures the extent of responsiveness of quantity (Qd) demanded due to…
Q: The ABC Co. manufactures digital clock radios and sells on average 3,000 units monthly at $25 each…
A: Price elasticity of demand measures the responsiveness of quantity demanded changes as a result of…
Q: Consider a competitive industry with a perfectly elastic supply curve given by p = 20. The demand…
A: Revenue is the income of sellers that is received by charging higher prices and selling more…
Step by step
Solved in 2 steps
- 3. Suppose that ABC company plans to build a subway train to provide better alternatives for Filipino commuters to avoid heavy traffic and delay during rush hour. Apparently, the subway can last up to 50 years only that its cost $ 5.5 million to build it. Assuming that it cost nothing for its maintenance. Consider the table below that shows potential demand of the subway train of the ABC company. For now, disregard the potential variety of the passenger's demographic.Price and cost (dollars per student) $150 120 88 76 72 ATC 40 - MC MR 24,000 30,000 36,000 Quantity of students enroiled 15,000 Your college decides to offer a psychology course as a MOOC that can be taken by students anywhere in the world, whether they are actually enrolled in your college or not. The demand and cost situation for the MOOC is shown in the figure. The faculty member who designed the course argues: "I think the course should be priced so that the maximum number of students enroll." Which price should this faculty member favor? O A. $0 В. $40 C. $88 D. $150JYour business has the capacity to produce up to 5 units/week. The table & graph below show average cost (AC) for different weekly production levels. Your objective is to maximize profit each week. Average Cost 22 20 AC 18 1 20 14 2 15 12 3 12 10 1 2 4 4 13 Quantity 15 Your product sells in the market for $21/unit, and you can sell as many units at that price as you can bring to market. You know from your economics training that deciding how much to produce should rely on marginal concepts like marginal cost (MC). So, based on the AC table above, create a table that shows the MC of each unit. (Assume that there are no fixed costs, so total costs are zero if Q=0.) Based on MC for each unit, determine the profit-maximizing quantity to produce and sell. BRIEFLY explain your answer. (Your answer needs to be based on MC and being able to sell each unit for $21.) AC ($/unit)
- 4. A puppet maker calculates that the yearly cost of running his manufactory is $14,000. Additionally it costs him $60 to create each of his puppets. The price per puppet is determined by the following price-demand equation: p=500–2x a. Find the Cost equation for the total number of puppets produced and sold Find the Revenue equation for the total number of puppets produced and sold b. c. How many puppets does he need to make and sell to break even? d. Use the Cost and Revenue equations to find the Profit function What is the price that he needs to charge if he wants to sell exactly 80 puppets? e.2. The gains and loss from selling one more unit Sean's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Sean produced seven fire engines, but he has decided to increase production to eight fire engines. The following graph shows the demand curve Sean faces. As you can see, to sell the additional engine, Sean must lower his price from $100,000 to $50,000 per fire engine. Note that although Sean gains revenue from the additional engine he sells, he also loses revenue from the initial seven engines because he sells them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial seven engines by selling at $50,000 rather than $100,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $50,000.The accompanying graph shows the short-run demand and cost situation for a price searcher in a market with low barriers to entry. Price (dollars) 24 10 V ATC The firm will receive $ MR Quantity/time The firm will maximize its profit at a quantity of▼ units. D Options: 6, 8, 9, or 10 After choosing the profit maximizing quantity, the firm will charge a price of in revenue at the profit-maximizing quantity. The total cost of production for this profit-maximizing quantity is $ The maximum profit the firm can earn in this situation is How will the situation change over time? Options: 6,8 10, or 24 per unit for this output. O Profits will attract rival firms into the market until the profit-maximizing price falls to the level of per-unit cost. O The market will adjust until the price charged by this firm no longer exceeds marginal cost at the profit-maximizing quantity. O This market is already in long-run equilibrium, and will not change throughout time. O Losses will induce firms to leave…
- 3. Suppose that ABC company plans to build a subway train to provide better alternatives for Filipino commuters to avoid heavy traffic and delay during rush hour. Apparently, the subway can last up to 50 years only that its cost $ 5.5 million to build it. Assuming that it cost nothing for its maintenance. Consider the table below that shows potential demand of the subway train of the ABC company. For now, disregard the potential variety of the passenger's demographic.100 90 80 70 60 ATC 50 40 30 20 AVC МС О 10 + 0 0 5 10 15 20 30 35 40 45 50 QUANTITY (Thousands of shirts) or each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assume hat when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero shirts and the profit-maximizing uantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will nake a profit, suffer a loss, or break even at each price. Price Quantity (Dollars per shirt) (Shirts) Profit or Loss? Produce or Shut Down? Shut down 10 20,000 Loss Shut down 20 10,000 Loss Shut down 32 5,000 Loss Either 0 or 37,500 Shut down 40 Loss 25 COSTS (Dollars)Suppose a science museum charges $15 for admission, and each day 200 adults visit the museum. Suppose the museum directors cannot change the price they charge, but they know that for every $1000 a day spent on advertising they can increase demand by 50 tickets. The cost of operating the museum for a day is $2,000. Which of the following advertising choices should they make to maximize profits? O Spend $100O0 a day on advertising O Spend $2000 a day on advertising O Spend no money on advertising O Spend $3000 a day on advertising
- The following graph shows the daily demand curve for bippitybops in Denver. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. PRICE (Dollars per bippitybop) 240 220 200 180 160 140 120 100 80 8 60 40 20 0 mớ H + 0 9 18 27 36 45 54 63 72 81 QUANTITY (Bippitybops per day) * Demand 90 B 99 108 Total Revenue (?)bo Use the table below to calculate the accounting and economic profit for Abner's Apple Art. Item Macmillan Learning Total revenue Costs Apples Utilities Lease Abner's forgone wages Numbers in the table are in thousands What is Abner's Apple Art's accounting profit? What is Abner's Apple Art's economic profit? Amount $220 $30 $20 $20 $70 Accounting profit = $ Economic profit = $ thousand thousandPrinciples of Microeconomics Name: Homework #3 Prof. R. Harris DUE: Wednesday, April 17, 2019 at the beginning of class - NO EXCEPTIONS. Please remember to show all work and please be neat. Please staple this if you print it on your own. 1. Consider the following table of numbers, which represents demand and cost conditions for a com firm. petitive TR 600 0 1 2 $o $400 600 $400 $240 600 $430 $670 $960 $1,350 $1,840 $2,440 $3,120 $3,910 $4,800 600 600 600 600 600 600 5 6 7 600 600 9 10 (a) Fill in the missing values (b) Use the information in the chart to determine what level of output the firm should produce. Explain your reasoning.