Question

MTBd=310-2QBd Mata=230 – 2Qtd Consider QBd=100, Q12=80. True or false? Midsouth should sell more tickets to business traveler
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Given that,

Profit functions are as follows:

M\pi _{Bd}=310-2Q_{Bd}

M\pi _{Td}=230-2Q_{Td}

Here, we consider

Q_{Bd}=100\ and\ Q_{Td}=80

At this point,

M\pi _{Bd}=310-2(100)

= 310 - 200

= 110

M\pi _{Td}=230-2(80)

= 230 - 160

= 70

So, the total profit at this point:

= 110 + 70

= 180

Now, suppose that Midsouth sell 20 more tickets to business travelers while 20 less tickets to tourist travelers.

Q_{Bd}=120\ and\ Q_{Td}=60

Therefore,

At this point,

M\pi _{Bd}=310-2(120)

= 310 - 240

= 70

M\pi _{Td}=230-2(60)

= 230 - 120

= 110

So, the total profit at this point:

= 70 + 110

= 180

Now, again suppose that Midsouth sell 40 more tickets to business travelers while 40 less tickets to tourist travelers.

Q_{Bd}=140\ and\ Q_{Td}=40

Therefore,

At this point,

M\pi _{Bd}=310-2(140)

= 310 - 280

= 30

M\pi _{Td}=230-2(40)

= 230 - 80

= 150

So, the total profit at this point:

= 30 + 150

= 180

Hence, by comparing the profit function,

we conclude that the total profit remains the same if the midsouth sell more tickets to the business travelers and fewer to the tourist travelers.

Therefore, the statement is False.

Add a comment
Know the answer?
Add Answer to:
MTBd=310-2QBd Mata=230 – 2Qtd Consider QBd=100, Q12=80. True or false? Midsouth should sell more tickets to...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 9. The logic of price discrimination Aa Aa Consider the market for airline tickets on Trans-America...

    9. The logic of price discrimination Aa Aa Consider the market for airline tickets on Trans-America Airlines from Los Angeles to Philadelphia. The following graph shows the demand curve, marginal revenue (MR) curve, and marginal cost (MC) curve for this particular flight In particular, the cost of adding another passenger to an otherwise empty seat is constant at $80. For simplicity, assume throughout this question that there are no supply constraints owing to seating capacity and assume that there are...

  • 2. Understanding the role of fixed cost in the short run Aa Aa Consider an airline's...

    2. Understanding the role of fixed cost in the short run Aa Aa Consider an airline's decision about whether or not to cancel a particular flight that hasn't sold out. The following table provides data on the total cost of operating a 100-seat plane for various numbers of passengers Number of Total Cost (TC) 35,000 55,000 65,000 67,000 68,000 68,500 69,000 70,000 70,500 70,800 70,900 Passengers 10 20 30 40 50 60 70 80 90 100 Given the information presented...

  • 1. Equilibrium GDP can operate at, below, or above full employment GDP. True/False 2. Imports have...

    1. Equilibrium GDP can operate at, below, or above full employment GDP. True/False 2. Imports have the same effect on the current size of GDP as A) exports B) investment C) consumption D) savings 3. With an MPC of 0.75, a $10 billion decrease in taxes will decrease equilibrium GDP by $30 billion. True/False 4. If equilibrium GDP exceeds full employment GDP, a recessionary gap exists. True/False 5. The economy below would be characterized as a domestic output AE, closed...

  • do questions 5 to 10, they are True/False questions Consider the balance sheet of Wilkes Industries...

    do questions 5 to 10, they are True/False questions Consider the balance sheet of Wilkes Industries as shown below. Because Wilkes has $800,000 of retained carnings, the company would be able to pay cash to buy an asset with a cost of $200.000 Cash Inventory Accounts receivable Total Current Assets Net fixed assets $ 50.000 Accounts payable 200.000 Accruals 250.000 Total Current Liabilities S500.000 Debt $ 900.000 Common stock Retained carnings 51.400.000 Total Liabilities & Equity $ 100.000 100.000 $200.000...

  • True / False Questions: 1. The flow of input data for budgeting should be from the...

    True / False Questions: 1. The flow of input data for budgeting should be from the highest levels of responsibility to the lowest True False 2. The master budget reflects management's long-term plans encompassing five years or more True False 3. The starting point when budgeting for a not-for-profit organization is generally to budget expenditures first True False The manufacturing overhead budget generally has separate sections for variable, mixed, and fixed costs True False 5. The budgeted income statement indicates...

  • state whether each statement 1-8 if its true or false Consider the balance sheet of Wilkes...

    state whether each statement 1-8 if its true or false Consider the balance sheet of Wilkes Industries as shown below. Because Wilkes has $800,000 of retained carnings, the company would be able to pay cash to buy an asset with a cost of $200.000 Cash Inventory Accounts receivable Total Current Assets Net fixed assets $ 50.000 Accounts payable 200.000 Accruals 250.000 Total Current Liabilities S500.000 Debt $ 900.000 Common stock Retained carnings 51.400.000 Total Liabilities & Equity $ 100.000 100.000...

  • 1) Although a proprietorship is not a separate legal entity, a partnership is True False 2)...

    1) Although a proprietorship is not a separate legal entity, a partnership is True False 2) Purchasing supplies on credit increases assets while decreasing liabilities. True False 3)On October 15, Gallery Comp. received $12,500 as a down payment on a consuting contract. The amount was credited to Unearned Consulting Revenue By October 31, 10% of the contract was completed. Gallery Corp. needs to prepare an adjusting entry for $1.250. True False 4) Asset, liability and revenue accounts are not closed...

  • TRUE OR FALSE/ MULTIPLE CHOICE and word response questions. C. a more permanent government involvement in the ba...

    TRUE OR FALSE/ MULTIPLE CHOICE and word response questions. C. a more permanent government involvement in the banking system, even creating a pational banking system that owns and operates most of the global and regional banks. Deshort-term increases in government spending to stimulate the economy. 20. When describing the state of the U.S. economy, reporters often refer to the nation's GDP, its unemployment rate, and the CPI. Explain what each of these terms means and why each measure is significant....

  • 1. Emilio buys pizza for $10 and soda for $2. He has income of $100. His...

    1. Emilio buys pizza for $10 and soda for $2. He has income of $100. His budget constraint will experience a parallel outward shift if which of the following events occur? a. The price of pizza falls to $5, the price of soda falls to $1, and his income falls to $50. b. The price of pizza rises to $20, the price of soda rises to $4, and his income remains the same. c. The price of pizza falls to...

  • Sent Need the answers for that whole question paper True or false questions (25) has any...

    Sent Need the answers for that whole question paper True or false questions (25) has any effect SECTION TRUE OR FALSE QUESTION (40 Marks) The following questions indicate if it's True or False. Each question carries 2 Marks 1. Accounting Principle is general law or rule followed in the preparation of financial statements 2. Usefulness, objectivity and feasibility are the three basic norms generally found in accounting principles 3. The Cash book record only the cash payments 4. If a...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT