(11.7). An airline has been collecting data to estimate demand for flights between Greenville, South Carolina, and Seattle, for which it would be the only provider. It has estimated this demand to be p = 1,000 - 2q. The total cost (in dollars) of this flight is TC(q)-50,000+20q. If the airline cannot discriminate, what price does it charge, how many tickets does it sell, and what is its' profit? Ⓒq-205, p-$310, profit-$125,600 q-245, p-$510, profit-$70,050 Ⓒq-245, p-$310, profit-$70,050 Ⓒq-205, p-$510, profit-$125,600 In addition to that, If the airline can do first- degree price discrimination (based on information it receives through its partners during online booking), how many tickets does it sell, and what is its profit?

(11.7). An airline has been collecting data to estimate demand for flights between Greenville, South Carolina, and Seattle, for which it would be the only provider. It has estimated this demand to be p = 1,000 - 2q. The total cost (in dollars) of this flight is TC(q)-50,000+20q. If the airline cannot discriminate, what price does it charge, how many tickets does it sell, and what is its' profit? Ⓒq-205, p-$310, profit-$125,600 q-245, p-$510, profit-$70,050 Ⓒq-245, p-$310, profit-$70,050 Ⓒq-205, p-$510, profit-$125,600 In addition to that, If the airline can do first- degree price discrimination (based on information it receives through its partners during online booking), how many tickets does it sell, and what is its profit?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter14: Pricing Techniques And Analysis

Section: Chapter Questions

Problem 1E

See similar textbooks

Similar questions

Suppose the figure to the right represents the market for a particular brand of soap such as Zest, Dove, or Ivory. Suppose also that the market is monopolistically competitive and the firm behaves optimally to maximize profit. Use the rectangle drawing tool to shade in the firm's economic profit or loss. Properly label the object. Carefully follow the instructions above, and only draw the required objects. Price and cost (per pack) 4.00- 3.80- 3.60 3.40 3.20 3.00- 2.80- 2.60- 2.40- 2.20 2.00+ 1.80 1.60- 1.40- 1.20 1.00- 0.80 0.60 0.40- 0.20- 0.00+ 0 2 MC MB 4 6 8 10 12 14 16 Quantity (packs of soap in thousands) ATC 18 20
14-2 German Brothels German brothels recently began offering a monthly subscription service for multiple purchasers. If you wished to reduce the incidence of prostitution, would you consider this pricing plan to be a desirable change?
Please type your NUMERICAL answer in the space below. ENTER ONLY THE NUMBER. IF answers are in decimals, please round the number to one decimal point. Winterfell Cable TV pays $100,000 per year to earn exclusive rights to air a premium sports channel. There are two types of subscribers in Winterfell: 3,000 die-hard sports fans who will pay as much as $200 a year for the new channel and 20,000 occasional sports viewers who will pay as much as $25 a year for a subscription to it. a) If Winterfell Cable is unable to price discriminate, what price will it charge and how much are its profits? Price Profits= b) If Winterfell Cable is able to price discriminate, how much will it make in profits? Profits= What is the deadweight loss associated with the nondiscriminating pricing policy compared to the price c) discriminating policy? DWL=
If your marketing department estimates that the semiannual demand for the highlander is q=150,000. - 1.5 P, what price should you charge in order to maximize revenues from the sales of highlander
A company produces a special new type of TV. The company has fixed costs of $477,000, and it costs $1100 to produce each TV. The company projects that if it charges a price of $2500 for the TV, it will be able to sell 750 TVs. If the company wants to sell 800 Tvs, however, it must lower the price to $2200. Assume a linear demand. What price should the company charge to earn a profit of $953,000? it would need to charge $_____.
Joe initially charged $180 for a electronic product and averaged 20 clients per week. When he raised his price to $220, the number of sales decreased to 15 per week. What is the price elasticity of demand for his product? Majed initially charged $50/hr. for helping with practice questions and averaged 35 clients per week. When he raised his price to $75, the number of sessions increased to 40 per week. What is the price elasticity of demand for his services?
Shaughnessy Consulting, LLC currently enjoys a patent on software that estimates economic damages for clients involved in personal injury lawsuits. Demand for my software is QD = 287.5 – 12.5P. Creating the software cost me about $985 in development and coding. I can produce a copy of the software for $11 per unit (constant cost). How many copies of the software should I attempt to sell? At what price should I sell it? How much profit would I make? My patent expires in a year, and I know other economic consultants will produce competing software. What quantity and price will result once competing software emerges? How much consumer surplus will my clients (lawyers) gain once the competitors enter? (For measuring consumer surplus, recall that area of a triangle = ½ * base * height.) How much deadweight loss is created by my patent and monopoly in this software?
Suppose you own a tax preparation services company, with fixed costs of $3,000/month and marginal costs of $25/appt.If the price is $60/appt, 500 appointments would be sold. If the price is $50/appt, 760appointments would be sold. a.)Use these figures to calculate the price elasticity of demand for your services. b.)Calculate the monthly profits and profit margins (profit/revenue) associated with the price of $60/appt and $50/appt. c.)Given these calculations, what price should you charge for your services, $50/apptor $60/appt? Explain
A company wants to issue a coupon for a product. The marginal cost of the product is $1. If the elasticity of demand for coupon users is -5 and the elasticity of demand for non-coupon users is -2, then in order to maximize profit, what should the value of the coupon (in dollars) be? Group of answer choices: 1) 0.50 2) 0.75 3) 1.00 4) 1.50
Question 2. 7. commissioned a study that showed the demand by fans for stadium seats (per playing date) to be P- 22 - 0.2Q, where P is the average price of a ticket and Q represents the number of seats (expressed in thousands). The local stadium seats a maximum of 56,000 per game. Suppose the owner offers you 10% of the revenues. If you can only choose a uniform per-ticket price, what is the maximum amount you can carn per game? (Note: Assume that all seats and all games are the same in this problem.) The owner of a baseball team and local stadium has
Suppose the own price elasticity of market demand for retail gasoline is -0.9, the Rothschild index is 0.6, and atypical gasoline retailer enjoys sales of $1, 200, 000annually. What is the price elasticity of demand for arepresentative gasoline retailer's product? Instruction:Enter your response rounded to two decimal places. Ifentering a negative number, be sure to use thenegative (-) sign.
At an amusement park with a “horror” roller coaster, management has estimated that the average visitor has a demand function P = 9 – (Q/3), where P is the average ride price and Q is the number ofof routes per visitor. The total cost to the average visitor is C = 1 + Q.Management is considering two pricing schemes. Either charge P per ride, or charge a general admission price that will allow the visitor to do as many rides as they want.(a) If management chooses per-ride pricing, what price will it charge and what will be the profit per visitor?(b) If he chooses a general entry price this will be such as to extract all of the surplus from each consumer. What will be the general admission price and profit per visitor?(hint: the general input price will be revenue P×Q + CS, where CS = 0.5×(9 – Ρ)×Q is the consumer surplus corresponding to the profit-maximizing quantity).