Questions:1-In a class experiment with 20 subjects, using BDM methodology, we collected the WTP data as presented in table1. Using this data please plot the demand function for this group of 20 subjects. (30 points)IDbid15210(1031141251311146789012341415161718192021211521162217251830193520401-odec2025302-In question 1, assume we choose to sell a single product. (30 points)a- Assuming that the variable cost (marginal cost) of the item sold was 7 tl, draw the profit curve for thisdemand function. What would be the price that maximizes the profits? What would be the resulting profit?

First, we need to organize the Willingness to Pay (WTP) data in descending order. This is because…

Answered: Questions: 1-In a class experiment with…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The price for cigarettes sold by Big Tobacco Co Ltd was6.00 per packet in March 2018. During the month of March, the consumption of cigarettes was 1000 packets. However, the Board of Directors of Big Tobacco Co Ltd decided to increase the price by 25% during the month of April. As a manager you noted that price elasticity of demand was 0.8. As a manager Big Tobacco Co Ltd: Advise your management ofthe strategy that could be adopted by your firm to maintain sales.
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