Please solve all the problems in this document. In part two, please answer questions with many steps do not only provide a final answer. The step need to be clear and logic. Also if problems need use graph to present those relationship please provide a simple graph to show.
Unformatted Attachment Preview
Short Answer Questions
1.(5 points) Each pair of Fancy Shoes costs Bradbury Footwear Stores $30. Bradburys economist has
estimated the point elasticity to be -1.8. WHat price should Bradbury charge if it wants to maximize
2.(46 points) An amusement park, whose customer set is made up of two markets, adults (A) and children
(C), has identified the demand functions as follows:
QA = 20 – PA
QC = 30 – 2PC
The marginal operating cost of each unit of quantity is $5. The park is a monopolist and exercises
significant price making power in the market.
Suppose the park charges a single price from both adults and children.
(2.1)(5 points) Calculate the aggregate demand curve QT faced by the monopolist.
(2.2)(5 points) Calculate the (aggregate) marginal revenue function M RT (Q) of the monopolist.
(2.3)(3 points) What is the profit maximizing level of output Q*T produced by the monopolist?
(2.4)(2 points) What is the price charged for that level of output?
(2.5)(3 points) Assuming that fixed costs are zero, how much (aggregate) profits ? T are earned by the
monopolist at the profit maximizing level of output?
Now suppose the park decides to charge different price from its Adult(A) and Children(C) customers
(2.6)(3 points) Calculate the revenue function T RA(Q) for the adult market.
(2.7)(3 points) Calculate the marginal revenue function M RA(Q) for the adult market. (2.8)(3
points) What is the profit maximizing number of tickets sold Q*A in the adult market? (2.9)(2
points) What is the ticket price charged for the adult market.?
(2.10)(3 points) Assuming that fixed costs are zero, how much profits are earned by the amusement park
in the adult market at the profit maximizing level of output?
(2.11)(3 points) Calculate the revenue function T RC(Q) for the children market.
(2.12)(3 points) Calculate the marginal revenue function M RC(Q) for the children market. (2.13)(3
points) What is the profit maximizing number of tickets sold Q*C in the children market? (2.14)(2
points) What is the ticket price charged in the children market?
(2.15)(3 points) Assuming that fixed costs are zero, how much profits are earned by the amusement park
in the children market at the profit maximizing level of output?
1 of 2
3.(37 points) A firm makes two products, X and Y. Inverse demand for each shows that pricing in one
market depends on sales in the other according to the equations:
PX = 1000 – 20X + 3Y
PY = 500 – 5Y + X
The firm faces joint fixed cost of $12000 and constant marginal cost of production in each product
segment, M CX = $200, and M CY = $100.
(3.1)(5 points) What is the firms total revenue function T R(X, Y )?
(3.2)(5 points) What is the firms marginal revenue function M RX for product X?
(3.3)(5 points) What is the firms marginal revenue function M RY for product Y?
(3.4)(10 points) What bundle of products ( X* , Y * ) should be produced by the firm?
(3.5)(7 points) How price should the firm charge for products X and Y ?
(3.6)(5 points) What profits result in this instance?
4.(12 points) The Jam Factory makes boutique jams that it sells in specialty stores in two different cities.
In City 1, the daily inverse demand function is
P1 = 12 – 0.5Q1
and the marginal revenue function is M R1 = 12 – Q1. In City 2, the inverse demand and marginal
revenue functions are
P2 = 20 – Q2
and M R2 = 20 – 2Q2. The firms cost function is
T C(Q) = 10 + 6Q
where Q = Q1 + Q2.Thus the firms marginal cost of production is 6 per unit.
(4.1)(4 points) Create an excel spreadsheet with columns for Q1, Q2, p1, p2, M R1, M R2 and M C. Put
the values 1 to 12 in increments of 1 in the Q1 column and put the same values in the Q2 column.
Fill in the appropriate formulas in the other cells, noting that MC column has the value 6 for each
(4.2)(6 points) The Jam Factory price discriminates by charging a different price in each city. Find the
profit-maximizing quantities and prices. Verify that the marginal revenues are the same in each
city at the profit maximizing quantities.
(4.3)(2 points) Determine the firms profit.
5.(10 points (bonus)) An anonymous survey is made available on Black Board. While I can not match
individual responses to any one of you, I can see whether or not you have submitted the survey. You
will earn 10 points if you submit Week 14 Survey by 11.59 p.m. on 28th April 2018.
6.(5 points (bonus)) Spring 2018 course evaluations are currently open on myIIT portal. Your responses
to these evaluations are stored anonymously. They are NOT be made available to me until 14 May
2018. However, I can view the aggregate response rate for the class. You will earn 5 points if aggregate
response rate reaches 80% by 11.59 p.m. on 28th April 2018.
2 of 2
Purchase answer to see full
Why Work with Us
Top Quality and Well-Researched Papers
We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.
Professional and Experienced Academic Writers
We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.
Free Unlimited Revisions
If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.
Prompt Delivery and 100% Money-Back-Guarantee
All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.
Original & Confidential
We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.
24/7 Customer Support
Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.
No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.
Admission Essays & Business Writing Help
An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.
Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.
If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.