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increase revenue and profit. Lower afternoon movie prices are an example of this type of pricing.
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A firm charges different groups of customers different prices in order to
- increase revenue and profit. Lower afternoon movie prices are an example of this type of pricing.
- decrease cost and increase profit. Student discounts are an example of this type of pricing.
- increase revenue and cost. Senior citizen discounts are an example of this type of pricing.
- increase revenue, but not profit. Higher holiday airfares are an example of this type of pricing.
- increase revenue and profit. Lower afternoon movie prices are an example of this type of pricing.
- decrease cost and increase profit. Student discounts are an example of this type of pricing.
- increase revenue and cost. Senior citizen discounts are an example of this type of pricing.
- increase revenue, but not profit. Higher holiday airfares are an example of this type of pricing.
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a. Complete the total revenue column from the demand-schedule data given below.
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See image
Quantity Demanded 1 - $5
Quantity Demanded 2 - $8
Quantity Demanded 3 - $9
Quantity Demanded 4 - $8
Quantity Demanded 5 - $5
Quantity Demanded 1 - $5
Quantity Demanded 2 - $8
Quantity Demanded 3 - $9
Quantity Demanded 4 - $8
Quantity Demanded 5 - $5
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b. Graph the demand curve and total revenue curve in the diagrams below.
Instructions: Using the diagram on the left for demand, use the tool provided 'Demand' to plot each price-quantity combination (plot 5 points total). Using the diagram on the right for total revenue, use the tool provided 'TR' and plot each quantity-revenue combination (plot 5 points total).
Instructions: Using the diagram on the left for demand, use the tool provided 'Demand' to plot each price-quantity combination (plot 5 points total). Using the diagram on the right for total revenue, use the tool provided 'TR' and plot each quantity-revenue combination (plot 5 points total).
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See image for Price graph
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b. Graph the demand curve and total revenue curve in the diagrams below.
Instructions: Using the diagram on the left for demand, use the tool provided 'Demand' to plot each price-quantity combination (plot 5 points total). Using the diagram on the right for total revenue, use the tool provided 'TR' and plot each quantity-revenue combination (plot 5 points total).
Instructions: Using the diagram on the left for demand, use the tool provided 'Demand' to plot each price-quantity combination (plot 5 points total). Using the diagram on the right for total revenue, use the tool provided 'TR' and plot each quantity-revenue combination (plot 5 points total).
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See image for Total Revenue graph
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c. Price and total revenue move in the opposite direction when demand is
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elastic
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Elasticity of demand for D1 (points a to b in the left diagram above) = 1.80
Elasticity of demand for D2 (points c to d in the right diagram above) = 0.56
Elasticity of demand for D2 (points c to d in the right diagram above) = 0.56
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Look at the demand curves in the diagrams below.
Instructions: Round your answers to 2 decimal places. Enter positive values for elasticities (absolute values).
a. Use the midpoint formula and points a and b to calculate the elasticity of demand for that range of the demand curve.
Elasticity of demand for D1 (points a to b in the left diagram above) =
Elasticity of demand for D2 (points c to d in the right diagram above) =
Instructions: Round your answers to 2 decimal places. Enter positive values for elasticities (absolute values).
a. Use the midpoint formula and points a and b to calculate the elasticity of demand for that range of the demand curve.
Elasticity of demand for D1 (points a to b in the left diagram above) =
Elasticity of demand for D2 (points c to d in the right diagram above) =
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Elasticity of demand for D3 (points e to f in the diagram above) = 1
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b. Do the same for the demand curve for the figure above.
Elasticity of demand for D3 (points e to f in the diagram above) =
Elasticity of demand for D3 (points e to f in the diagram above) =
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Percentage change in quantity supplied/percentage change in price
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a. What is the formula for measuring the price elasticity of supply?
- Percentage change in quantity supplied/percentage change in price
- Percentage change in quantity supplied/percentage change in income
- Percentage change in quantity demanded/percentage change in price
- Percentage change in quantity demanded/percentage change in income
- Percentage change in quantity supplied/percentage change in price
- Percentage change in quantity supplied/percentage change in income
- Percentage change in quantity demanded/percentage change in price
- Percentage change in quantity demanded/percentage change in income
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Inelastic
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c. Is its supply elastic, or is it inelastic?
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Price elasticity = 0.85
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b. Suppose the price of apples goes up from $20 to $24 a box. In direct response, Goldsboro Farms supplies 1,400 boxes of apples instead of 1,200 boxes. Compute the coefficient of price elasticity (midpoints approach) for Goldsboro's supply.
Instructions: Round your answer to 2 decimal places.
Instructions: Round your answer to 2 decimal places.
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a. Complete the following table and answer the questions below:
Instructions: Enter your answers as whole numbers.
Instructions: Enter your answers as whole numbers.
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See image
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b. At which rate is total utility increasing: a constant rate, a decreasing rate, or an increasing rate? How do you know?
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A decreasing rate because marginal utility is declining
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the time consumers save when purchasing goods there.
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In the last decade or so, there has been a dramatic expansion of small retail convenience stores (such as 7-Eleven, Kwik Shop, and Circle K), although their prices are generally much higher than prices in large supermarkets. The success of these convenience stores can be partially explained by
- cost savings due to their smaller size.
- the time consumers save when purchasing goods there.
- diseconomies of scale.
- the high prices they charge.
- cost savings due to their smaller size.
- the time consumers save when purchasing goods there.
- diseconomies of scale.
- the high prices they charge.
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ould be expected since people have to pay the cost of their own use.
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Many apartment-complex owners are installing water meters for each apartment and billing the occupants according to the amount of water they use. This is in contrast to the former procedure of having a central meter for the entire complex and dividing up the collective water expense as part of the rent. Where individual meters have been installed, water usage has declined 10 to 40 percent. This decline in water usage
- will occur only in the short run, then people will return to their old habits.
- is the result of higher water rates passed by the city.
- would have been expected only if the water use was initially metered.
- would be expected since people have to pay the cost of their own use.
- will occur only in the short run, then people will return to their old habits.
- is the result of higher water rates passed by the city.
- would have been expected only if the water use was initially metered.
- would be expected since people have to pay the cost of their own use.
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1) A $15 cash that can be spent anywhere
2) A store-specific gift card worth $15
3) A $15 item from a specific store
2) A store-specific gift card worth $15
3) A $15 item from a specific store
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Rank each of the following three gift possibilities in terms of how much utility they are likely to bring (with 1 being the highest and 3 being the lowest):
Rank the options below.
- A store-specific gift card worth $15
- A $15 cash that can be spent anywhere
- A $15 item from a specific store
Rank the options below.
- A store-specific gift card worth $15
- A $15 cash that can be spent anywhere
- A $15 item from a specific store
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A: 4 units
B: 3 units
C: 3 units
D: 0 units
B: 3 units
C: 3 units
D: 0 units
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Columns 1 through 4 in the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the price of good A is $18, the price of good B is $6, the price of good C is $4, and the price of good D is $24. Ricardo's income is $106.
Instructions: Enter your answers as whole numbers.
a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility?
Instructions: Enter your answers as whole numbers.
a. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility?
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$4
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b. How many dollars will Ricardo choose to save?
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($18 x 4) ($6 x 3) ($4 x3) ($24 x 0) + $4 = $106
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Instructions: Enter your answers as whole numbers and in the format of price times quantity.
c. Check your answers by substituting them into the algebraic statement, verifying that all of Ricardo's income is spent.
c. Check your answers by substituting them into the algebraic statement, verifying that all of Ricardo's income is spent.
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X= 2 units
Y= 5 units
Y= 5 units
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You are choosing between two goods, X and Y, and your marginal utility from each is as shown below.
Instructions: Enter your answers as whole numbers.
a. If your income is $9 and the prices of X and Y are $2 and $1, respectively, what quantities of each will you purchase to maximize utility?
Instructions: Enter your answers as whole numbers.
a. If your income is $9 and the prices of X and Y are $2 and $1, respectively, what quantities of each will you purchase to maximize utility?
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48
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b. What total utility will you realize?
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X = 4 units
Y = 5 units
Y = 5 units
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c. Assume that, other things remaining unchanged, the price of X falls to $1. What quantities of X and Y will you now purchase?
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Price | Quantity Demanded
$ 2 | 2
1 | 4
$ 2 | 2
1 | 4
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d. Using the two prices and quantities for X, derive a demand schedule (a table showing prices and quantities demanded) for X.
Instructions: Start with the highest price first
Instructions: Start with the highest price first
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