When there are low barriers to entry in a now profitable market, there may be a flood of alternative suppliers. This will cause a shift in the demand curve and price. Group of answer choices left, higher left, lower right, lower right, higher the
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- Some years ago. two intercity bus companies, Greyhound Lines, Inc. and Trailways Transportation System, wanted to merge. One possible definition of the market for this case was the market for intercity bus service. Another possible definition was the market for intercity transportation, including personal cars, car rentals, passenger trains, and commuter air flights.' Which definition do you think the bus companies preferred, and why?Amonofoly is Charar terized the average Cost Ac- 0/44 and the margzaa . COst MC =0/2 Where 0 Is the 9uantity Produced, the demand for the monoP0LY good 7s Cl= 10-P. Where P Ts Price the Pair of OPtimai uanETEY and Price of the Profit maximizing mono Poly IsExplain the methods used toallocate the integratedmarketing communications(IMC) budget.
- A publisher faces the following demand schedule for the next novel from one of its popular authors:Price Quantity Demanded100 090 100,00080 200,00070 300,00060 400,00050 500,00040 600,000 530 700,00020 800,00010 900,0000 1,000,000The author is paid $2 million to write the book, and the marginal cost of publishing the book is aconstant $30 per book.a. Compute total revenue, total cost, and profit at each quantity. What quantity would a profitmaximizing publisher choose? What price would it charge? b. Compute marginal revenue. (Recall that MR=∆TR/∆Q.) How does marginal revenue compare tothe price? Explain. c. Graph the marginal-revenue, marginal-cost, and demand curves. At what quantity do themarginal-revenue and marginal-cost curves cross? What does this signify? d. In your graph, shade in the deadweight loss. Explain in words what this means. e. If the author was paid $3 million instead of $2 million to write the book, how would this affectthe publisher’s decision regarding the price…e ap sep 0 ja ajaloo Purwas ap o Consider a town in which only two residents, Clancy and Eileen, own wells that produce water safe for drinking. Clancy and Eileen can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water. Tab Caps Lock Price (Dollars per gallon) 6.00 5.50 5.00 4.50 Esc is 81°F Sunny 4.00 3.50 3.00 2.50 2.00 1.50 1.00 ! 0.50 0 7 Q A Quantity Demanded (Gallons of water) 0 45 17 F2 8- @ Suppose Clancy and Eileen form a cartel and behave as a monopolist. The profit-maximizing price is $ gallons. As part of their cartel agreement, Clancy and Eileen agree to split production equally. Therefore, Clancy's profit is - C VE 2 W 90 135 S. 180 225 270 315 360 405 450 495 540 F3 0+ #M 3 Total Revenue (Dollars) 0 $247.50 $450.00 $607.50 $720.00 $787.50 $810.00 $787.50 $720.00 $607.50 E F4 BO $450.00 $247.50 0 D $ 4 F5 R F % 5 F6 D T F7 ^ 6 G 4- Y FB J+ & 7 per gallon, and the total…As you review the Facebook site, you note that packagingfor your company’s bread uses the words “heart-healthy.”Would you bring this to the attention of the marketing groupresponsible for product packaging? Or would you look fora way to obscure the package design online? Defend youranswer.
- Suppose an airline sells air tickets to two types of customer – business travelersand vacation travelers. Their estimated demand elasticities are -2.5 and -4.0respectively.Suppose the marginal cost is constant at $240, and the services provided to thetwo types of customer are similar.a. Based on the given information, explain with TWO practical reasons whether theairline should charge a higher price on business travelers or vocational travelers.Explain without calculation.Is a monopolistically competitive firm productively efficient? Is it allocatively efficient? Why or why not?List the characteristics of products that haveinelastic demand, and give several examples ofsuch products.
- PRICE (Dollars per EpiPen) 1000 900 800 700 600 500 400 300 200 100 0 1 True 2 4 3 5 6 7 QUANTITY (Thousands of EpiPens) False MR 8 D ATC MC If Mylan continues to charge $150 per EpiPen, Mylan will earn + 9 H 10 Qat $150 + Profit Max ATC at Profit Max Profit True or False: Given the demand curve for EpiPens, you should tell Mylan's CEO that total revenue will increase if she raises the price of EpiPens because the demand curve in this region is relatively elastic. economic profit.Andrea’s Day Spa began to offer a relaxingaromatherapy treatment. The firm asks you how muchto charge to maximize profits. The first two columnsin Table 10.5 provide the price and quantity for thedemand curve for treatments. The third column showsits total costs. For each level of output, calculate totalrevenue, marginal revenue, average cost, and marginalcost. What is the profit-maximizing level of output forthe treatments and how much will the firm earn inprofits?(c) A discriminating monopolist is faced with the following price elasticities: e1-0.75 and What pricing policy should the monopolist adopt in the two markets? In which market will it be profitable for the monopolist to operate? Assume now that er ez 0.50, will it be advisable for the monopolist to discriminate or operate a single market? run. Briefly explain why the monopolist has no unique supply curve in the short Unlike the competitive firm, the monopoly firm can make supernormal profit in the long run. Explain why. e-1.50 i. ii. iii. iv. V.
