Demand and supply in the market for board games are given by the following equations: The equilibrium point is (Q*, P*) = (13,6). What deadweight loss results from a price ceiling of $3 in the market for board games? Do not round your answer. Qd = 25-2P Qs = 4P-11 The deadweight loss is $ Number
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- 2. A market analysis employed by the "Sad Student Company" reveals that the number of lots of the game named "Handsome Killer: Revenge of the Teacher" ordered by the wholesalers when the game is offered at a price of dollars per lot is given by the formula: p=1500 – 2.5q a) Find the company's total, marginal and average revenues b) Find the price and quantity maximizing the total revenue by first expressing the revenue as a function of price rather than of quantity2. The demand for fishing on the salmon river for two individuals A and B are as follows: QA(P) = 40-2P QB(P) = 30-P where Q is the number of fish, and P represents the marginal value of fish caught (in dollars). Suppose again that the demands describe fish caught and kept for eating (fish catch/keep is divisible/rivalrous as in question 1), but only 40 fish total are allowed to be caught and kept (assume the Fish and Game Department does not charge for fishing - they just limit the number allowed to be caught). (a) If each fisher is allowed to catch and keep 20 fish, what would be the marginal value of the 20th fish for each fisher? (b) If each fisher is allowed to catch and keep 20 fish, what is the total surplus for each fisher, and total surplus for both (ignoring any costs of fishing)? (c) Suppose the fishers were allowed to transfer their fishing rights. What would be the optimal allocation of fish between the two individuals, who would sell to whom and at what price?…Two cities are connected by two links of road transportation (local road and highway). highway Local road The highway has a supply function of: t2=2q2 And the local road has a supply function of: t1=4+q1 The total demand is constant: 10 trips What is the user equilibrium flows on each link? What is the travel time of each link/mode? What is the system optimum flows if you use the convention? What toll would you charge on each link to achieve these flows? а. b. С. d.
- The Chief Medical Officer has advised the government that consumption of widget-corn improves the survival rate of COVID-19 by 20%. Supposethe supply and demand functions for widget-corn are:QD = 100 – 5P (1)QS = 5P. (2) P is the price in dollar and Q is the quantity in kilograms.a. Determine the market equilibrium price and quantity of widget-corn? b. Calculate the consumer surplus, producer surplus, and total economic surplus at the market equilibrium. c. Having confirmed the positive impact of widget-corn consumption on COVID-19 patients, the government has ordered widget-cornsellers to charge $5 per kilogram.(i) What type of price regulation policy is this? Briefly explain. (ii) Calculate the impact of the policy on the quantity of widget-corn supplied and demanded. (iii) Explain the impact of the policy consumer surplus, producer surplus, and total economic surplus. (iv) Is the outcome of the government’s policy efficient and, therefore, maintained or abandoned? Explain in detail.…QUESTION 1: The Chief Medical Officer has advised the government that consumption of widget-corn improves the survival rate of COVID-19 by 20%. Suppose the supply and demand functions for widget-corn are:QD = 100 – 5P (1) QS = 5P. (2) P is the price in dollar and Q is the quantity in kilograms. a. Determine the market equilibrium price and quantity of widget-corn? b. Calculate the consumer surplus, producer surplus, and total economic surplus at the market equilibrium. c. Having confirmed the positive impact of widget-corn consumption on COVID-19 patients, the government has ordered widget-corn sellers to charge $5 per kilogram. (i). What type of price regulation policy? Briefly explain. (ii). Calculate the impact of the policy on the quantity of widget-corn supplied and demanded. (iii) Explain the impact of the policy consumer surplus, producer surplus, and total economic surplus. (iv) Is the outcome of the government’s policy efficient and, therefore, maintained or abandoned?…Following information shows that a firm offering a good at different prices to groups of consumers with different levels of willingness to pay. Inverse Demand for movies: P1 = 20 – 4Q1 Inverse Demand for students: P2 = 10 – Q2 MC = 4Q LKR /ticket (a) What price and quantity and maximizes profits if the firm charges each market? (b) Demonstrate that charging different prices for the two groups results in higher profits than charging the same price for everyone. (c) Graph the demand curves, the marginal revenue curves, the marginal cost curve and highlight the equilibrium.
- Exercise 3.1 A publisher must take a decision on the pricing of a new book based on the following demand estimates: Price 100 90 80 70 60 50 40 30 20 10 0 Number of copies demanded 0 100 000 200 000 300 000 400 000 500 000 600 000 700 000 800 000 900 000 1 000 000 According to his contract, the writer gets two million euros for writing the book and the marginal cost of publishing the book is constant at €10 per book. a) Calculate the total income, total cost and profit corresponding to each amount. How many books would a profit-maximizing publisher print? What price would she charge? (b) Calculate the marginal revenue. What is the difference between marginal revenue and price? Explain your answer. c) Draw the curves of marginal revenue, marginal cost and demand. For what output level does the marginal revenue curve cut the marginal cost curves? What does that mean?Solve a Consumers' or Producers' Surplus Problem. A sports watch has a price-demand equation given by p= D(z) = 40-2-0174176a dollars, which gives the price per watch when a watches are demanded. The price-supply equation for the watch is given by p= S(x) = 0.6z+4 dollars, which gives the price per watch when z watches are supplied. If the equilibrium quantity is 11, find the consumers' surplus and the producers' surplus. The consumers' surplus is. (Your answer must begin with S.) The producers' surplus is Your answer must begin with $.)AT&T. It is early in the days of cellular (or mobile) telephony, and you are the price manager for AT&T's cell phone plan. It has been determined that there are two market segments: low-value consumers and high-value consumers. For simplicity, assume that all consumers within a segment are identical. A consumer in the low-value segment has monthly demand (measured in number of minutes) of Q, (p) = 80 - p, and a consumer in the high-value segment has monthly demand of QH (P) = 100 -p, where p is in cents per minute. a. Assume AT&T charges a flat price per minute with no membership fee. Derive the expression for consumer surplus for a low-value consumer and for a high-value consumer as a function of the price, p. Low-value consumer surplus, CS, (p): = High-value consumer surplus, CS, (p) = Show Transcribed Text Assume AT&T's marginal cost is a constant 10 cents per minute. You have decided to use a two-part tariff and must choose the monthly fixed fee f and the per-minute charge p. There…
- Hariri Shuttles (HS) makes two types of shuttles (for looms), type A and type B. The demand for equations for HS shuttles are 9A [Select] = ¶B where PÅ and pÅ are the prices set by HS for type A and type B shuttles, respectively, and 9₁ and q are the corresponding weekly demands for these goods. HS's weekly production cost is c = 30qA+40qB + 1000. (a) The prices that HS should set to maximize their weekly profit are p [Select] [Select] and PB = 100 - 3PA +2PB and 120+ PA 1.5PB (b) The corresponding weekly demands are (c) HS' maximum weekly profit is * = = [Select] [Select] = and B =11. Application: Elasticity and hotel rooms The following graph input tool shows the daily demand for hotel rooms at the Peacock Hotel and Casino in Las Vegas, Nevada. To help the hotel management better understand the market, an economist identified three primary factors that affect the demand for rooms each night. These demand factors, along with the values corresponding to the initial demand curve, are shown in the following table and alongside the graph input tool. (Note: All values are hypothetical.) Demand Factor Initial Value Average Canadian household income $50,000 per year Round trip airfare from Toronto (YYZ) to Las Vegas (LAS) $100 per round trip Room rate at the Grandiose Hotel and Casino, which is near the Peacock $250 per night Use the graph input tool to help you answer the following questions. You will not be scored on any changes you make to this graph. оп апy Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field…Consider PNW Airlines, an airline focused on transporting cargo. Their fleet is composed of four cargo airplanes. Total cargo capacity of the fleet is 100,000 cubic feet. The monthly cost of maintaining and operating the fleet is $50,000. Market research indicated that the demand curve for cargo capacity is d=300,000-25,000p where d is the demand across all segments and p is the transport price per cubic foot. Question 1: What is the price that maximizes profit for PNW Airlines if all the demand comes from a single segment? What is the demand if PNW sets price to be the value found in Question 1? How much profit does PNW Airlines make?