A project requires signing buying 500 cubic yards of concrete per week for the next year from the only local provider. The currently price is $100 per yard and the provider sells 5,000 yards per week. Assuming marginal cost is constant, elasticity of demand at the current price is -1.5, and using a linear demand approximation, estimate the opportunity cost of the weekly government purchase. The METB is 0.2. Note you will need to find the original demand, the new demand, the new price, and the new quantity purchased by those other than the government in the process.
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A project requires signing buying 500 cubic yards of concrete per week for the next year from the only local provider. The currently price is $100 per yard and the provider sells 5,000 yards per week. Assuming marginal cost is constant,
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- A project requires signing buying 500 cubic yards of concrete per week for the next year from the only local provider. The currently price is $100 per yard and the provider sells 5,000 yards per week. Assuming marginal cost is constant, elasticity of demand at the current price is -1.5.The METB (marginal excess tax burden) is 0.2. a) find opportunity cost of the weekly government purchase (Opportunity Cost = Total Revenue – Economic Profit) b)find original demand and the new demand (Qd = a – b(P)) C)find the new price, and the new quantity purchased by those other than the government in the process.Mr. Mondal is a potato wholesaler at Nasik. The per capita consumption of potatoes per day is about 200 grams. Currently, potatoes are being priced at Rs.6 per kg. The price elasticity of potatoes is 0.62. Due to present short supply of potatoes Mr. Mondal decides to increase the price. If he can sustain a reduced sales volume up to 10%, compute the maximum price he can set is (Round off your answer up to one decimal only)The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 105e3p- + P, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a) Determine the price elasticity of demand E when the retail price is set at ¥700. E = Interpret your answer. The demand is going down v is advised. by % per 1% increase in price at that price level. Thus, a large price decrease (b) At what price will revenue be a maximum? hundred yen (c) Approximately how many paint-by-number sets will be sold per month at the price in part (b)? (Round your answer to the nearest integer.) paint-by-number sets per month
- A AWB Company is interested in obtaining quick estimates of the supply and demand curves for coal. The firm's research department informs you that the elasticity of supply is approximately 1.7, the elasticity of demand is approximately -0.85, and the current price and quantity are $41 and 1,206, respectively. Price is measured in dollars per ton, quantity the number of tons per week. Estimate linear supply and demand curves at the current price and quantity. Illustrate both curves on a diagram. What impact would a 10% increase in demand have on the equilibrium price and quantity? Illustrate this impact on similar diagram in part (i) If the government refused to the price increase when demand increased in (ii) above,how much shortage is created?. Mark the shortage on the diagram in part (ii)The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 95ep − 3p2⁄2, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a)Determine the price elasticity of demand E when the retail price is set at ¥300. E = Interpret your answer. The demand is going by % per 1% increase in price at that price level. Thus, a large price ___ is advised. (b)At what price will revenue be a maximum? (Round your answer to the nearest integer.) yen (c)Approximately how many paint-by-number sets will be sold per month at the price in part (b)? (Round your answer to the nearest integer.) paint-by-number sets per monthMicropack producers would like to seek the advice of your Market Research company to advise and give your analysis of a new mask that allows greater protection from the Covid - 19 Virus. The following information about the company was given: The demand equation of x=35000-50p, where x is the demand at $p per mask was given. The cost of producing a mask was at a cost of $20. The company has an ongoing cost of 2000. Micropack would like to seek advice on a price of $30, if this will be profitable to the company with the hope that it becomes the best-selling mask and production could cease on the other type. Suggestions with reasoning are welcomed on a more appropriate price that would be financially sound. An analysis of the exact and approximate cost of producing 101st mask. An analysis of the cost, revenue and profit function must also be analysed in your advice to the company and the importance in decision making for the marginal functions of each, and what it signifies to the…
- The US demand curve for transporting freight by truck is а° - 580B - 60в "Р, where B denotes billion. Here, P is the price to transport a standard shipping container one mile, and quantity Q is the number of shipping-container-miles transported in a year. The marginal cost of transport is $1/mile (i.e., fuel and driver costs). Each truck can drive up to a maximum of 100,000 miles/year. Assume each truck carries one shipping container. The annual fixed cost of operating a truck is $200,000. Consequently, the average cost of a truck that drives q miles a year is ($200,000/q) +$1. All trucks have the same costs. There are no barriers to setting up a new trucking firm and/or acquiring additional trucks, and there are large numbers of people capable of running a trucking firm. Part (a) Sketch average and marginal costs for a truck, as a function of miles driven. Part (b) (i) (ii) (ii) (iv) (v) What is the price-per-mile of transporting freight by truck? How many miles does the combined US…The demand equation for the deluxe marble kit produced by Whoville Marble Works (WMW) is p = 600 - 3q -0.01q² where p is the price WMW sets for the kit and q is the number of kits that they sell in a week. (a) Find the price that WMW should set to maximize their weekly revenue, the corresponding revenue maximizing output and their maximum weekly revenue. Round your answers to 2 decimal places. (b) Show how you know that the revenue you found in (a) is WMW's absolute maximum weekly revenue.The estimated monthly sales of Mona Lisa paint-by-number sets is given by the formula q = 105eP - 3p/2, where q is the demand in monthly sales and p is the retail price in hundreds of yen. (a) Determine the price elasticity of demand E when the retail price is set at ¥300. E = 24 Interpret your answer. The demand is going down v by 24 % per 1% increase in price at that price level. Thus, a large price decrease v is advised. (b) At what price will revenue be a maximum? (Round your answer to the nearest integer.) yen (c) Approximately how many paint-by-number sets willI be sold per month at the price in part (b)? (Round your answer to the nearest integer.) paint-by-number sets per month
- A plant with a marginal abatement function described by MAC = 75-5E is polluting the town's water supply. Emissions are measured in tons per year. a) Government regulators propose that the company pay a tax equal to $30 per ton of emissions. How many tons will the firm abate when faced with this tax, and how much better off will it be compared to if it does no abating. b) Suppose that, instead of the tax, the government offers to pay the firm $30 for each ton of emissions it abates. How many tons will the firm abate, and how much better off will it be compared to if it does no abating? c) If damages caused by the firm's emissions is described by the function MD = 5E, what tax rate would encourage the firm to abate to the socially efficient level of emissions? Compute the private and social compliance cost and the net benefit accruing to society from the socially efficient emissions tax. %3DQ1. Suppose the government is considering an increase in the toll on a certain stretch of highway from $3 to $4. At present, 1 million cars per week use that highway stretch; after the toll is imposed, the number of cars per week will change according to its price elasticity of demand of -0.8 (this elasticity value is estimated based on the initial-value method). If the marginal cost of highway use is constant (i.e., the supply curve is horizontal) and equal to $3 per car, what is the net annual cost to society attributable to the increase in the toll? (your answer must be rounded off to the nearest million dollars per year, i.e., no decimal places; there are 52 weeks in a year)SJ Mask producers would like to seek the advice of your Market Research company to advise and give your analysis of a new mask that allows greater protection from the Covid -19 Virus. The following information about the company was given: The demand equation of x=35000-50p, where x is the demand at $p per mask was given. The cost of producing a mask was at a cost of $20. The company has an ongoing cost of 2000. SJ mask would like to seek advice on a price of $30, if this will be profitable to the company with the hope that it becomes the best-selling mask and production could cease on the other type. Suggestions with reasoning are welcomed on a more appropriate price that would be financially sound. An analysis of the exact and approximate cost of producing 101st mask. An analysis of the cost, revenue and profit function must also be analysed in your advice to the company and the importance in decision making for the marginal functions of each, and what it signifies to the company.…