Price Discrimination (3 points) A ski resort caters to both out-of-town skiers and local skiers. The...
Price Discrimination (3 points)
A ski resort caters to both out-of-town skiers and local skiers. The demand for lift tickets for each market segment is independent of the other market segment. The marginal cost of servicing a skier of either type is $40. The demand formulas for the two market segments are:
Out-of-towners: Qo=1000-5P
Locals: QL=1000-10P
(a) Assume that the resort charges one price to all skiers. What is the total demand formula? What is the profit-maximizing price? How many tickets will be sold to each group? What are the total revenue, total cost, and profit from the two combined markets? Show all calculations.
(b) Assume that the resort charges a different price to locals than it does to out-of-town skiers. What is the profit-maximizing price for each group of consumers? How many tickets will be sold to each group? What is the combined profit with price discrimination? Show all calculations.
Homework Answers
Add Answer to:
Price Discrimination (3 points)
A ski resort caters to both out-of-town skiers and local skiers.
The...
7-9, The Snow City Ski Resort caters to both out-of-town skiers and local skiers. The demand...
7-9, The Snow City Ski Resort caters to both out-of-town skiers and local skiers. The demand for ski tickets for each market segment is independent of the other market segments. The marginal cost of servicing a skier of either type is $1O. Suppose the demand curves for the two market segments are Out of town: o 600 10P Local: Qi=600-20P a. If the resort charges one price to all skiers, what is the profit-maximizing price? Calcu- late how many lift...
The Snow City Ski Resort caters to both out-of-town skiers and local skiers. The demand for...
The Snow City Ski Resort caters to both out-of-town skiers and local skiers. The demand for ski tickets of out-of-town skiers is given by Q o = 800 - 16 P o, while the demand for ski tickets of local skiers is given by Q l = 800 - 20 P l . The marginal cost of servicing a skier of either type is $10. If Snow City Ski Resort (third-degree) price discriminates then the profit maximizing prices (for a ski...
Suppose you own the only spa in a small college town. Everybody in town is either...
Suppose you own the only spa in a small college town. Everybody in town is either a student or a professor. Their demand functions for your Relaxing Healing Package (RHP) are: Qp = 175-P Qs = 125-P Where Qp and Qsis quantity demanded by professors and students, respectively. Your average variable costs are $50 per customer regardless of the quantity, and your fixed costs are $1000 per month. A) Suppose first that you only sell your product through coupons online,...
3. You live in a town with 300 adults and 200 children, and you are considering,...
3. You live in a town with 300 adults and 200 children, and you are considering, producing a play. The production would have a fixed cost of $2,000 but no marginal costs beyond that Below are the demand schedules for adults and children.(a) What is the profit maximizing price to charge for adults? For children? How many tickets will you sell? What is your profit? (b) Suppose the city passed a law banning any form of price discrimination. What is the...
8. International price discrimination Le Jouet is a French firm, and it is the only seller...
8. International price discrimination Le Jouet is a French firm, and it is the only seller of toy trains in France and Russia. Suppose that when the price of toy trains increases, Russian children more readily replace them with toy airplanes than French children. Thus, the demand for toy trains in Russia is more elastic than in France. The following graphs show the demand curves for toy trains in France (Dp) and Russia (DR) and marginal revenue curves in France...
9. The logic of price discrimination Aa Aa Consider the market for airline tickets on Trans-America...
9. The logic of price discrimination Aa Aa Consider the market for airline tickets on Trans-America Airlines from Los Angeles to Philadelphia. The following graph shows the demand curve, marginal revenue (MR) curve, and marginal cost (MC) curve for this particular flight In particular, the cost of adding another passenger to an otherwise empty seat is constant at $80. For simplicity, assume throughout this question that there are no supply constraints owing to seating capacity and assume that there are...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under 65 and senior citizens. The monopolist's marginal oost is MC = 0.05q, where q is the total output in both markets. The marginal cost does not depend on the market in which the goods are sold. The demand curves are Adults: PA-25-1/6 x QA-25-0.1667 x QA Seniors: PS = 15-⅛xQs-15-0.125 x Qs ● . A. What is the total industry demand curve? (Rewrite each...
Monopoly: Fantastic Films is the only movie theater in an isolated town. The table below illustrates...
Monopoly: Fantastic Films is the only movie theater in an isolated town. The table below illustrates the demand schedule for movie tickets and the cost schedule for producing the movies. Complete the table. Maximize your browser window to view all columns in the table. Price ($ per ticket) Quantity (tickets per show) Price ($ per ticket) Quantity (tickets per show) Total Revenue (dollars per show) Marginal Revenue Total Cost (dollars per show) Marginal Cost 20 0 1000 18 100 1600...
Notes: Show all calculations. Draw neat graphs Price discrimination by a monopolist A profit-maxi...
help with #7, please!
Notes: Show all calculations. Draw neat graphs Price discrimination by a monopolist A profit-maximizing monopolist sells the same good in 3 separate markets. The demand functions and cost function are given below Demand in Market 1: P 80-4Q, Demand in Market 2: P,-100 50 Demand in Market 3: P,-70 - 60, Cost function: C- 20 +2-4Q, where Q is total output, 1. (4 points) Obtain the firm's profit function in terms of the three choice variables...
A freight firm holds a monopoly over rail freight transport in Australia. The freight firm has...
A freight firm holds a monopoly over rail freight transport in Australia. The freight firm has two types of customers: • Coal mining companies’ demand for freight services is Qc = 38 − Pc . • Grain farmers’ demand for freight services is Qg = 56 − 4Pg . All quantities are measured in tonnes. The firm faces a constant marginal cost of $10 per tonne, regardless of which commodity is being transported. The firm has no fixed costs. a)...
7-9, The Snow City Ski Resort caters to both out-of-town skiers and local skiers. The demand for ski tickets for each market segment is independent of the other market segments. The marginal cost of servicing a skier of either type is $1O. Suppose the demand curves for the two market segments are Out of town: o 600 10P Local: Qi=600-20P a. If the resort charges one price to all skiers, what is the profit-maximizing price? Calcu- late how many lift...
Suppose you own the only spa in a small college town. Everybody in town is either a student or a professor. Their demand functions for your Relaxing Healing Package (RHP) are: Qp = 175-P Qs = 125-P Where Qp and Qsis quantity demanded by professors and students, respectively. Your average variable costs are $50 per customer regardless of the quantity, and your fixed costs are $1000 per month. A) Suppose first that you only sell your product through coupons online,...
3. You live in a town with 300 adults and 200 children, and you are considering, producing a play. The production would have a fixed cost of $2,000 but no marginal costs beyond that Below are the demand schedules for adults and children.(a) What is the profit maximizing price to charge for adults? For children? How many tickets will you sell? What is your profit? (b) Suppose the city passed a law banning any form of price discrimination. What is the...
8. International price discrimination Le Jouet is a French firm, and it is the only seller of toy trains in France and Russia. Suppose that when the price of toy trains increases, Russian children more readily replace them with toy airplanes than French children. Thus, the demand for toy trains in Russia is more elastic than in France. The following graphs show the demand curves for toy trains in France (Dp) and Russia (DR) and marginal revenue curves in France...
9. The logic of price discrimination Aa Aa Consider the market for airline tickets on Trans-America Airlines from Los Angeles to Philadelphia. The following graph shows the demand curve, marginal revenue (MR) curve, and marginal cost (MC) curve for this particular flight In particular, the cost of adding another passenger to an otherwise empty seat is constant at $80. For simplicity, assume throughout this question that there are no supply constraints owing to seating capacity and assume that there are...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under 65 and senior citizens. The monopolist's marginal oost is MC = 0.05q, where q is the total output in both markets. The marginal cost does not depend on the market in which the goods are sold. The demand curves are Adults: PA-25-1/6 x QA-25-0.1667 x QA Seniors: PS = 15-⅛xQs-15-0.125 x Qs ● . A. What is the total industry demand curve? (Rewrite each...
help with #7, please!
Notes: Show all calculations. Draw neat graphs Price discrimination by a monopolist A profit-maximizing monopolist sells the same good in 3 separate markets. The demand functions and cost function are given below Demand in Market 1: P 80-4Q, Demand in Market 2: P,-100 50 Demand in Market 3: P,-70 - 60, Cost function: C- 20 +2-4Q, where Q is total output, 1. (4 points) Obtain the firm's profit function in terms of the three choice variables...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago