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a. what is the optimal quantity of goods for the firm to produce
b. what is the optimal
c. what is the total revenue for the firm
d. what is the total cost for the firm
e. what is
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- 1. A manufacturer estimates that D(p)=3000e0.05p units of a particular good will be sold at market price of p cedis per unit. Determine the market price that will result in marginal revenue of zero. 2. A manufacturer estimates that q = 800/30 – p units of a commodity are demanded when cedis per unit are charged. a. Express the price elasticity of demand as function of p . b. Calculate the price elasticity of demand when p=10. Interpret the result. c. Find the price at which the price elasticity of demand is unit-elastic. 3. An auto maker estimates that when q units of its saloon cars are sold in a day, its profit in millions of cedis is modelled as P(q) =100+25In 20 Find the 2 number of cars that should be produced and sold to maximise profit.3. Consider a monopolist who faces the following demand: Demand: P= 100 – 10Q MC= 50+20 a) Find the price quantity combination that maximizes profit for the monopolist. b) Is the firm making positive, negative or zero profits? (100,100) Kareem chooses (60, 105) (500, 400) Saleem chooses Kareem chooses (50,420) 4. Calculate the SPNE/SPNES for the game stated above.15.5 (0) The demand function for drangles is q(p) = (p+ 1)-2. (a) What is the price elasticity of demand at price p? (b) At what price is the price elasticity of demand for drangles equal to -1?. (c) Write an expression for total revenue from the sale of drangles as a function of their price. the revenue-maximizing price. Don't forget to check the second-order Use calculus to find condition.. (d) Suppose that the demand function for drangles takes the more general form q(p) = (p+a)-b where a > 0 and b > 1. Calculate an expression for the price elasticity of demand at price p. At what price is the price elasticity of demand equal to –1?_ -
- The market demand for electricity in a city has the following schedule: Price Total Quantity (kwh) Average Marginal Revenue Revenue Revenue ($/kwh) 14 12.50 1 11 9.50 8 4 6.50PRICE (Dollars per unit) 350+ 225 175) 50 0 Region Between Y and Z Between W and X Between X and Y Z True False X 28 36 QUANTITY (Units) For each of the regions listed in the following table, use the midpoint method to identify if the demand for this good is elastic, (approximately) unit elastic, or inelastic. I 56 W Demand True or False: The slope of the demand curve is equal to the value of the price elasticity of demand. Elastic Inelastic Unit ElasticJohnny Rockabilly has just finished recording his latest CD. The company can produce the CD with no fixed cost and a variable cost of $18 per CD. His record company's marketing department determines that the demand for the CD is as follows: Complete the following table by computing total revenue for each quantity listed and marginal revenue for each 5,000 increase in the quantity sold. Price Number of CDs Total Revenue Marginal Revenue (Dollars) (Dollars) (Dollars) 30 10,000 28 15,000 26 20,000 24 25,000 22 30,000 20 35,000 Profit is maximized at a quantity of $? CDs and a price of $ ? . This results in a profit of $ ? If you were Johnny's agent, you would advise Johnny to demand a recording fee of from the record company. $ ?
- 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 quantityJohnny Rockabilly has just finished recording his latest CD. The company can produce the CD with no fixed cost and a variable cost of $18 per CD. His record company's marketing department determines that the demand for the CD is as follows: Complete the following table by computing total revenue for each quantity listed and marginal revenue for each 5,000 increase in the quantity sold. Price Total Revenue Marginal Revenue (Dollars) Number of CDs (Dollars) (Dollars) 30 10,000 28 15,000 26 20,000 24 25,000 22 30,000 20 35,000 CDs and a price of . This results in a profit of $ Profit is maximized at a quantity of from the record company. If you were Johnny's agent, you would advise Johnny to demand a recording fee of > a || Desktop 69°F 1O ipQuestion 1 Sal's Streaming Company streams TV shows to subscribers in the US and Canada. Demand is Qus 50 (1/3)Pus - QCA 80 (2/3)P CA = - where Q's are in thousands of subscriptions per year and P's are the subscription prices per year. The cost of providing Q units of service is given by TC = 1000 + 30Q, where Q = Qus+ QCA (a) What are the profit-maximizing prices and quantities for the US and Canadian markets? (b) As a consequence of a new VPN service that Facebook has developed, subscribers in Canada are now able to get the US streams and vice versa, so Sal can charge only a single price. What is the profit-maximizing single price that he should charge? (c) In which situation is Sal better off? In terms of consumers' surplus which situation do people in Canada prefer and which do people in the US prefer? Why?
- Figure 94 Monopolist (dollars) 10 8 6 0 Quantity MC Refer to Figure 94. Suppose that the profit-maximizing/loss minimizing level of output is 40 units per day and the average fixed cost and average variable cost of producing this amount is $4 $7, respectively. (a) What is the total cost of producing 40 units per day? Show your work. (b) What is the total profit earned/loss incurred by producing 40 units per day? Show your work. (c) What price will the firm charge to maximize profit or minimize loss? (d) Should the firm shut down or continue to produce in the short run? Explain.5. Denton Cheese Company (DCC) makes a unique variety of cheese they call Eagle Cheese. They sell it as a monopoly, but a government agricultural support program will pay DCC $7.50 per pound for as much cheese as DCC wants to sell to the government. The market demand for Eagle Cheese is the following: P = 12-.003Q The cost of making the cheese is as follows: C = 2Q+.002Q² If the goal is profit maximization, how much cheese should DCC sell to the market and what price should they charge? Also, how much should they sell to the government?(Categories of Price Elasticity of Demand) For each of the following absolute values of price elasticity of demand, indicate whether demand is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic. In addition, determine what would happen to total revenue if a firm raised its price in each elasticity range identified. Absolut Value Elasticity Effect of Price Increase a b c d
