5. The price-elasticity of demand for a tub of popcorn at Minges-Coliseum is Ep = -1.5....
5. The price-elasticity of demand for a tub of popcorn
at Minges-Coliseum is Ep = -1.5. The marginal cost of a tub of
popcorn is $1. What is the profit maximizing price of a tub of
popcorn?
6. The price-elasticity of demand for leisure rail travel is Ep =
-1.52. The price of a round-trip ticket for one passenger on Amtrak
from Wilson to Miami this spring break is $157. Calculate the
marginal cost to Amtrak of this trip?
Homework Answers
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5. The price-elasticity of demand for a tub of popcorn
at Minges-Coliseum is Ep = -1.5....
Firm A has price elasticity of demand of –1.5 and a marginal cost of $30. Firm...
Firm A has price elasticity of demand of –1.5 and a marginal cost of $30. Firm B has a price elasticity of demand of –2.0 and a marginal cost of $30. What is the profit maximizing price of each firm?
1.The price elasticity of demand for senior citizens purchasing coffee from McDonald's is estimated to be...
1.The price elasticity of demand for senior citizens purchasing coffee from McDonald's is estimated to be -5 while non-seniors have a price elasticity of demand of -1.25. If it costs McDonald's 40 cents to produce a cup of coffee, the optimal price for a cup of coffee for senior citizens and resultant marginal cost under third-degree price discrimination are, respectively: a.$1.20 and $.40 b.$.32 and $.40 c.$.50 and $.40 d.$.45 and $.80 2.During spring break students have a price elasticity...
The price elasticity of demand for the output of a profit-maximizing firm is E = −2....
The price elasticity of demand for the output of a profit-maximizing firm is E = −2. This firm will mark up the price of its product above marginal cost by __________ percent. 100 150 None of the options. 50 25
The price elasticity of demand for the output of a profit-maximizing firm is E = −4....
The price elasticity of demand for the output of a profit-maximizing firm is E = −4. This firm will mark up the price of its product above marginal cost by __________ percent. 25 150 50 100 None of the options.
2. Suppose that econometricians at Hallmark Cards determine that the price elasticity of demand for greeting cards is -...
2. Suppose that econometricians at Hallmark Cards determine that the price elasticity of demand for greeting cards is -3. 1. If Hallmark's marginal cost of producing cards is constant and equal to $1.00, use the Lerner index to determine what price Hallmark should charge to maximize profit. 2. Hallmark hires you to estimate the price elasticity of demand faced by its archrival, American Greetings. Hallmark estimates that American's marginal cost of producing a greeting card is $1.50. You note that...
The price elasticity of demand for the output of a profit-maximizing firm is E = −4....
The price elasticity of demand for the output of a profit-maximizing firm is E = −4. This firm will mark up the price of its product above marginal cost by __________ percent. A. 25 B. 50 C. 100 D. 150 E. None of the options
Assume a first estimate their price elasticity of demand (EQxPx) to be -3.5, and their marginal...
Assume a first estimate their price elasticity of demand
(EQxPx) to be -3.5, and their marginal cost to be $15.
3. Assume a firm estimate their price elasticity of demand (EQxPx) to be -3.5, and their marginal cost to be $15. a. Using the mark-up rule, what is the optimal price for the firm to charge? 2 points b. Confirm that your answer above is correct, by computing the profit maximizing quantity and price using MR = MC if the...
A Cournot oligopoly has four firms in the industry. The market price elasticity of demand is...
A Cournot oligopoly has four firms in the industry. The market price elasticity of demand is -2.5 and the marginal cost of production is $200. What is the profit- maximizing price, rounded to the nearest dollar? $500 $222 $354 More information is needed to answer this question. $208
A Cournot oligopoly has four firms in the industry. The market price elasticity of demand is...
A Cournot oligopoly has four firms in the industry. The market price elasticity of demand is -2.5 and the marginal cost of production is $200. What is the profit maximizing price, rounded to the nearest dollar? O $200 O $500 5354 $222 More information is needed to answer this question
Understand the price elasticity of demand formula 2. Draw a perfectly elastic and perfectly inelastic demand...
Understand the price elasticity of demand formula 2. Draw a perfectly elastic and perfectly inelastic demand curve and label each 3. Be able to identify whether demand is elastic or inelastic given changes in quantity and price 4. Be able to calculate percentage change using the midpoint formula and be able to apply it to calculate the price elasticity of demand 5. Know the determinants of the price elasticity of demand and be able to identify how they change price...
2. Suppose that econometricians at Hallmark Cards determine that the price elasticity of demand for greeting cards is -3. 1. If Hallmark's marginal cost of producing cards is constant and equal to $1.00, use the Lerner index to determine what price Hallmark should charge to maximize profit. 2. Hallmark hires you to estimate the price elasticity of demand faced by its archrival, American Greetings. Hallmark estimates that American's marginal cost of producing a greeting card is $1.50. You note that...
Assume a first estimate their price elasticity of demand
(EQxPx) to be -3.5, and their marginal cost to be $15.
3. Assume a firm estimate their price elasticity of demand (EQxPx) to be -3.5, and their marginal cost to be $15. a. Using the mark-up rule, what is the optimal price for the firm to charge? 2 points b. Confirm that your answer above is correct, by computing the profit maximizing quantity and price using MR = MC if the...
A Cournot oligopoly has four firms in the industry. The market price elasticity of demand is -2.5 and the marginal cost of production is $200. What is the profit- maximizing price, rounded to the nearest dollar? $500 $222 $354 More information is needed to answer this question. $208
A Cournot oligopoly has four firms in the industry. The market price elasticity of demand is -2.5 and the marginal cost of production is $200. What is the profit maximizing price, rounded to the nearest dollar? O $200 O $500 5354 $222 More information is needed to answer this question
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