31. Type of product: In a small town, there are four providers of broadband Internet access: a cable company (e.g., Xfinity), the phone company (e.g., AT&T), and two satellite companies. The Internet access offered by all four providers is of the same speed. Almost everyone in the city already has broadband, so any potential new company would be unable to compete with the existing providers. * (1 Point) Unique Differentiated Standardized (Identical) 32. Unique providers of broadband Internet access: a cable , AT&T), and two satellite companies. The

31. Type of product: In a small town, there are four providers of broadband Internet access: a cable company (e.g., Xfinity), the phone company (e.g., AT&T), and two satellite companies. The Internet access offered by all four providers is of the same speed. Almost everyone in the city already has broadband, so any potential new company would be unable to compete with the existing providers. * (1 Point) Unique Differentiated Standardized (Identical) 32. Unique providers of broadband Internet access: a cable , AT&T), and two satellite companies. The

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter16: Government Regulation

Section: Chapter Questions

Problem 2.3CE

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O Macmillan Learning The accompanying graph depicts the long-run costs and revenue for a monopolistically competitive firm. The numbers in parentheses show the output level and the cost, respectively, associated with various points. Place point A at the profit maximizing price and quantity. 800 750 700 MC ATC (11,600) 650 600 (3,550) 550 What is the profit-maximizing output of this monopolistically competitive firm? Cost and Revenue ($) 500 450 (5,425) $400 (8, 400) 350 (7,340) 300 250 Units of Output 200 (5, 200) 150 100 50 MR What is the level of excess capacity for this monopolistically competitive firm? 0 0 1 2 3 4 5 6 7 8 Units of Output Units of Output (11,500) 9 10 11 12 13 14 15
Review Question 12-01 O A monopolistically competitive firm gets a massive amount of free advertising when a government agency gives it an award and millions of people mention the award to each other on social media. Which of the following is most likely to happen? Mc Graw Multiple Choice O Demand becomes more elastic and pricing power increases. Demand becomes less elastic and pricing power decreases. Demand becomes less elastic and pricing power increases. Demand becomes more elastic and pricing power decreases. < Prev 10 of 10 MacRook Di Next
3. Suppose Microsoft is selling the two products to the individuals below with their willingness to pay for each item as in the table. Suppose the costs of producing each item is $10 for both products. Find the maximum profit of Microsoft if it can sell with either unit pricing, pure or mixed bundle prices for these items. TIT Word Processor Spreadsheet Alice 20 10 Ben 40 30 Chris 80 70 Daniel 60 50
1. Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web site construction is estimated to be $160,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $46. a. Build a spreadsheet model to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3,500 copies?b. Use a data table to vary demand from 1,000 to 6,000 in increments of 200 to assess the sensitivity of profit to demand.c. Use Goal Seek to determine the access price per copy that the publisher must charge to break even with a demand of 3,500 copies. d. Consider the following scenarios: Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Variable Cost/Book $6 $8 $12 $10 $11 Access Price $46 $50 $40 $50 $60 Demand 2,500 1,000 6,000 5,000 2,000 For each of these scenarios,…
2. Some companies are considering using Goògle's Android operating system for their tablet PCs and netbooks. How would you expect Microsoft to react if Google succeeds in entering the market for desktop applications in this way?
II. Problem 1. Tennis Products, Inc., produces three models of high-quality tennis rackets. The following table contains recent information on the sales, costs, and profitability of the three models: Average Quantity Sold (Units/Month) 15,000 5,000 10,000 Variable, Cost per Contribution Current Price Total Margin Per Unit Contribution Model Revenue Unit Margin* $225,000 85,000 250,000 $560,000 A $30 $450,000 175,000 450,000 $1,075,000 $15 $15 B 35 18 17 C 45 20 25 Total * Contribution to fixed costs and profits. The company is considering lowering the price of Model A to $27 in an effort to inçrease the number of units sold. Based on the results of price changes that have been instituted in the past, Tennis Products' chief economist estimates the arc price elasticity of demand to be -2.5. Furthermore, she estimates the arc cross elasticity of demand between Model A and Model B to be approximately 0.5 and between Model A and Model C to be approximately 0.2. Variable costs per unit are…
(12) Suppose all firms in a monopolistically competitive industry were merged into one large firm. Would that new firm produce as many different brands? Would it produce only a single brand? Explain.
PRICE (Dollars per engine) 100 90 80 70 60 40 30 & 2 20 10 MO D 0 10 ATC MR Demand 20 30 40 50 60 70 DO 90 QUANTITY (Thousands of engines) 100 Mon Comp Outcome Min Unit Cost Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact that optimal quantity. Furthermore, a monopolistically competitive firm's average total cost in long-run equilibrium is average total cost. at the the minimum
6. Why might a monopolist advertise heavily for its product even though it isn't competing with any firm for market share?
7. Suppose you are employed at a monopolistic company as a research (pricing) economist and you are deriving the behavior of two markets based on demand curves given by:D1(p1) = 50 − p1D2(p2) = 50 − 2p2 Assume that the marginal cost is constant at $8 a unit.(a) If it can price discriminate, what price should it charge in each market in order to maximize profits? (b) If it can’t price discriminate, what price should it charge? 8. Pele enjoys coffee (C) and tea (T) according to the function Replace 'Pele' with Alana U(C, T) = 3C + 4T(a) What does her utility function say about her MRS of coffee and tea?(b) Suppose the price of coffee (PC) and the price of tea (PT) are both $3. If Alana has $12 to spend on these products,i. How much coffee and tea should she buy to maximize her utility? ii. Draw a carefully labeled graph of her indifference curve map and her budget constraint. Put the quantities of coffee on the horizontal axis. Be sure to identify the utility maximizing point.(c)…