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There are only two groups of consumers in a particular market. Let the demand curve of...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under 65 and senior citizens. The monopolist's marginal oost is MC = 0.05q, where q is the total output in both markets. The marginal cost does not depend on the market in which the goods are sold. The demand curves are Adults: PA-25-1/6 x QA-25-0.1667 x QA Seniors: PS = 15-⅛xQs-15-0.125 x Qs ● . A. What is the total industry demand curve? (Rewrite each...
The market for tickets to this year’s football games consists of two groups of consumers. Let...
The market for tickets to this year’s football games consists of two groups of consumers. Let x1 denote the demand for tickets by fans of one of the visiting teams, and let x2 denote the demand for tickets by students who enjoy the spectacle. Let the price of the ticket be denoted by px, and suppose that everyone who purchases a ticket pays the same price. The demand functions of the two consumer groups has been determined as follows. There...
Problem Set 1 Due Date: Wednesday, January 25,2017 1. Consider the following demand function of an...
Problem Set 1 Due Date: Wednesday, January 25,2017 1. Consider the following demand function of an individual for good 1: where p" p2, ps are the prices of good 12, and 3, respectively, and Y represents the income the individual. Suppose good 1 and 2 are substitutes while good 1 and 3 are complements. (a) Describe in words what B,,B,, B, and B, measure. (b) Can you say anything about the expected signs of p.B.B, and B, in the demand...
5. Consider the following market demand for a good that consumers buy one unit at a...
5. Consider the following market demand for a good that consumers buy one unit at a time (e.g. smartphones, cars, game consoles, etc). Q=620-2P. A market research shows that there are two groups of consumers, A and B, with different sensitivity to price change. Group A’s demand is estimated to be QA=200-0.5P and Group B’s demand is estimated to be QB=420-1.5P. Marginal Cost is assumed to be $30. Given the information above, determine the most appropriate optimal pricing strategy and...
There are two consumers in the economy, Will and Kyle. Will's demand for bananas is Qw(p) = 20 – 2P. Kyle's is Qk(p) =...
There are two consumers in the economy, Will and Kyle. Will's demand for bananas is Qw(p) = 20 – 2P. Kyle's is Qk(p) = 20 – 0.5P. (a) What is Will's price elasticity of demand? What about Kyle? What does this depend on? (b) Find the market demand curve for bananas. (c) If p = 3, what is the price elasticity of market demand? How do Will and Kyle's elasticities of demand compare to that of the market?
Avi and Maya are the only two consumers in an economy. Avi’s demand for apples is...
Avi and Maya are the only two consumers in an economy. Avi’s demand for apples is given by the equation xA(p) = 6 − p, where p is the per unit price of apple. Maya’s demand for apples is given by the equation xB (p) = 10 − p. (a) Derive the aggregate demand x(p) = xA(p)+xB(p). Draw the aggregate demand where price of apples is on the vertical axis and the aggregate quantity consumed is on the horizontal axis....
3. Imagine there exist three consumers, each with their own demand curves for a Public Good....
3. Imagine there exist three consumers, each with their own demand curves for a Public Good. The equations below provide the demand curves for each consumer for this public good where P is the unit price of the public good and Q is the unit value of the public good. Consumer 1: P = 200 – Q Consumer 2: P= 40 – 30 Consumer 3: P = 50 - Q. The total cost (TC) producing the public good is given...
2.2 The inverse demand function of a group of consumers for a given type of widgets...
2.2 The inverse demand function of a group of consumers for a given type of widgets is given by the following expression: 11-10a + 2000 ($) where q is the demand and r is the unit price for this product. a Determine the maximum consumption of these consumers. b Determine the price that no consumer is prepared to pay for this product. c Determine the maximum net consumers' surplus. Explain why the consumers will not be able to realize this...
The inverse demand function of a group of consumers for a given type of widgets is...
The inverse demand function of a group of consumers for a given type of widgets is given by the following expression: 2.2 π=-104 + 2000 (S) 2.3 2.4 and 2.5 Economists estimate that the supply function for the widget market is given by the following expression: 2.3 4-0.2--40 a Calculate the demand and price at the market equilibrium if the demand is as defined in Problem 2.2 b For this equilibrium, calculate the consumers' gross surplus, the consumers' net surplus,...
2.2 The invers e demand function of a group of consumers for a given type of...
2.2 The invers e demand function of a group of consumers for a given type of widgets is given by the following expression: π-10a + 2000 ($) where q is the demand and r is the unit price for this product. a Determine the maximum consumption of these consumers. b Determine the price that no consumer is prepared to pay for this product. c Determine the maximum net consumers' surplus. Explain why the consumer will not be able to realize...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under 65 and senior citizens. The monopolist's marginal oost is MC = 0.05q, where q is the total output in both markets. The marginal cost does not depend on the market in which the goods are sold. The demand curves are Adults: PA-25-1/6 x QA-25-0.1667 x QA Seniors: PS = 15-⅛xQs-15-0.125 x Qs ● . A. What is the total industry demand curve? (Rewrite each...
Problem Set 1 Due Date: Wednesday, January 25,2017 1. Consider the following demand function of an individual for good 1: where p" p2, ps are the prices of good 12, and 3, respectively, and Y represents the income the individual. Suppose good 1 and 2 are substitutes while good 1 and 3 are complements. (a) Describe in words what B,,B,, B, and B, measure. (b) Can you say anything about the expected signs of p.B.B, and B, in the demand...
There are two consumers in the economy, Will and Kyle. Will's demand for bananas is Qw(p) = 20 – 2P. Kyle's is Qk(p) = 20 – 0.5P. (a) What is Will's price elasticity of demand? What about Kyle? What does this depend on? (b) Find the market demand curve for bananas. (c) If p = 3, what is the price elasticity of market demand? How do Will and Kyle's elasticities of demand compare to that of the market?
3. Imagine there exist three consumers, each with their own demand curves for a Public Good. The equations below provide the demand curves for each consumer for this public good where P is the unit price of the public good and Q is the unit value of the public good. Consumer 1: P = 200 – Q Consumer 2: P= 40 – 30 Consumer 3: P = 50 - Q. The total cost (TC) producing the public good is given...
2.2 The inverse demand function of a group of consumers for a given type of widgets is given by the following expression: 11-10a + 2000 ($) where q is the demand and r is the unit price for this product. a Determine the maximum consumption of these consumers. b Determine the price that no consumer is prepared to pay for this product. c Determine the maximum net consumers' surplus. Explain why the consumers will not be able to realize this...
The inverse demand function of a group of consumers for a given type of widgets is given by the following expression: 2.2 π=-104 + 2000 (S) 2.3 2.4 and 2.5 Economists estimate that the supply function for the widget market is given by the following expression: 2.3 4-0.2--40 a Calculate the demand and price at the market equilibrium if the demand is as defined in Problem 2.2 b For this equilibrium, calculate the consumers' gross surplus, the consumers' net surplus,...
2.2 The invers e demand function of a group of consumers for a given type of widgets is given by the following expression: π-10a + 2000 ($) where q is the demand and r is the unit price for this product. a Determine the maximum consumption of these consumers. b Determine the price that no consumer is prepared to pay for this product. c Determine the maximum net consumers' surplus. Explain why the consumer will not be able to realize...
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