Two rival oligopolists in the coffee industry, Wide Awake and Zuma, have to decide on their pricing strategy. Each can choose either a high price or a low price. The above figure shows the payoff matrix with the profits that each firm can expect to earn depending on the pricing strategy it adopts

Two rival oligopolists in the coffee industry, Wide Awake and Zuma, have to decide on their pricing strategy. Each can choose either a high price or a low price. The above figure shows the payoff matrix with the profits that each firm can expect to earn depending on the pricing strategy it adopts

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in Denver. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. 2 Total Revenue PRICE (Dollars per bike) 88NR S 89 88 89 O 300 275 18 27 35 45 54 53 72 QUANTITY (Bikes) 91 Demand 90 99 108
6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in San Diego. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. 10600 2 1000 9000 8200 7400 6000 5000 5000 4200 300 3400 275 250 225 200 175 150 On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $50, $75, $100, $125, $150, $175, and $200 per bike. 125 100 75 50 25 0 4 B Demand 0 10 20 30 40 50 60 70 80 90 100 110 120 QUANTITY (Bikes) T▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ 0 25 50 75 100 125 150 175 200 225 250 275 300 PRICE (Dolars per bike) A Total Revenue Total Revenue (?) According to the midpoint method, the price elasticity of demand between points A and B is approximately
The following graph shows the daily demand curve for bikes in Chicago. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. 300 275 250 Total Revenue 225 200 175 A 150 В 125 100 75 50 25 Demand + 10 20 30 40 50 60 70 80 90 100 110 120 QUANTITY (Bikes) PRICE (Dollars per bike)
1) Walkers’ Shoes reports the following demand schedule for its black brogues.Price 1600 800 400 200 100 50 25 12.5Quantity demanded 2 4 8 16 32 64 128 256a) For an increase in price from 50 to 100, calculate:i) The proportional change in price.ii) The proportional change in quantity demanded.iii) The price elasticity of demand for Walkers’ black brogues.b) Considering the demand schedule in the table, what do you conclude about the value of the price elasticity of demand for Walkers’ black brogues at every level of output? How would you classify the demand for such a good?c) What is the effect on Walkers Shoes’ total revenue of doubling the quantity of shoes which it supplies? What is the value of its marginal revenue? How does your answer relate to the value of the price elasticity of demand?d) The income elasticity of demand for Walkers’ Shoes is estimated to be 1.8. By how what percentage do you expect demand to increase if its customers’ incomes increase from 31,500 to 38,500?
3. Using the midpoint method The following graph shows two known points (X and Y) on a demand curve for tomatoes. 0102030405060708090100109876543210PRICE (Dollars per pound)QUANTITY (Thousands of pounds of tomatoes)DemandXYSlope: -0.05 According to the midpoint method, the price elasticity of demand for tomatoes between point X and point Y is approximately (0.05 / 0.2 / 0.25 / 5) , which suggests that th demand for tomatoes is (elastic / inelastic ) between points X and Y.
Homework (Ch 05) The following graph shows the daily demand curve for bikes in Miami. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. ? 300 275 250 225 200 175 150 A 125 100 75 50 25 77°F Sunny PRICE (Dollars per bike) B Demand a Total Revenue 21 St
Hans is a butcher in Washington. The following contains data on prices and weekly sales at his shop Good Beef Chicken Price 9.00/lbs $4.00/lbs Quantity 400 lbs 300 lbs ShS He estimates that the own price elasticity for beef is 2 and for chicken is .75. He also estimates that the cross price elasticity for chicken is .60. His current revenue from the sale of these two goods is making a total of $4800/week. In the spirit of the return to good times and outdoor grilling, he has decided to lower the price of beef for the summer, from $9.00 to $8.55. Overall, Hans can expect to take in dollars in revenue, given the information in this problem? (Revenue = Price x sales). Record your answer without a dollar sign and without a comma. Helpful Hint: In this problem, we are not changing the price of chicken.
Refer to the graph shown. When price rises from $10 to $30: 60 50 40 30 20 10 A 0000 B A1 с D E A2 F A3 ( 0 5 10 15 20 25 30 35 40 45 50 55 60 Quantity lost revenue is represented by areas B and C and gained revenue is represented by area F. gained revenue is represented by areas B and C and lost revenue is represented by area F. Olost revenue is represented by areas B, C, and D and gained revenue is represented by area A. O gained revenue is represented by areas B, C, and D and lost revenue is represented by area A.
5. Elasticity and total revenue The following graph shows the daily demand curve for bikes in Miami. . Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. 300 275 250 Total Revenue 225 200 A 175 150 125 100 75 50 25 Demand 10 15 20 25 30 35 40 45 50 55 60 QUANTITY (Bikes) On the folowing graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $50, $75, $100, $125, $150, $175, and $200 per bike. 5300 4500 Total Revenue 4500 400 W 3700 3300 2900 2500 2100 1700 25 50 75 100 125 150 175 200 225 250 275 300 PRICE (Dollars per bike) According to the midpoint method, the price elasticity of demand between points A and B is approximately Suppose the price of bikes is currently $100 per bike, shown as point B on the initial graph. Because the demand between points A and B is va $25-per-bike increase in price will lead to v in…
6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in San Diego. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. 240 220 200 Total Revenue 180 160 * 140 120 100 80 60 40 20 Demand 18 27 36 45 54 63 72 81 90 108 QUANTITY (Bikes) On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $40, $60, $80, $100, $120, $140, and $160 per bike. On the following graph, use the green point (triangle symbol) to plot the annual total revenue when the market price is $40, $60, $80, $100, $120, $140, and $160 per bike. 6250 5820 Total Revenue 5390 4960 w 4530 4100 3670 3240 2810 2380 0.47 80 100 120 140 160 180 200 220 240 PRICE (Dollars per bike) 20 40 60 2.14 31.5 According to the midpoint method, the price elasticity of demand between points A and B is approximately Suppose…
monthly dearmad schedule for a good in a cucocly Semonth. Tires ara no marginal costs. The table below shows the monthly demand schedule for a good in a dinne $4.800 of fixed costs per month. There are no marginal costs. Quantity 400 Price ($) 30 TR ($) MR ($) 12,000 3,000 688 25 15,000 • 1,000 800 20 16,000 -1,000 1,000 15 15,000 -3,000 1,286 10 12,000 -5,000 1,400 5 7,000 -7,000 1,688 0 0 Instructions: Enter your answers to the nearest whole number ce, the monthly profit for each a. If they evenly split the quantity a monopolist would produce, the mantly s If duopolist A decides to increase production by 200 units, the monthly p
Walkers’ Shoes reports the following demand schedule for its black brogues. Price 1600 800 400 200 100 50 25 12.5 Quantity Demand 2 4 8 16 32 64 128 256 For an increase in price from 50 to 100, calculate: i) The proportional change in price. ii) The proportional change in quantity demanded. iii) The price elasticity of demand for Walkers’ black brogues.