Managerial Economics

1. A monopoly produces widgets at a marginal cost of $10 per unit and zero fixed costs. It faces an inverse demand function given by P = 50 - Q. Which of the following is the marginal revenue function for the firm? A. MR = 60 - 2Q B. MR = 50 - Q C. MR = 100 - Q D. MR = 50 - 2Q 2. A firm with market power has an individual consumer demand of Q = 20 - 4P and costs of C = 4Q. What is optimal price to charge for a block of 20 units? A. $18 B. $36 C. $72 D. $90

Develop Demand and Cost Schedules

Q = 25 - 0.05P TC = 700 + 200Q Develop demand and cost schedules. What is the quantity to sell to maximize profits? What price is needed to maximize revenue? What price is needed to maximize revenue but keep profits at a minimum of $300?

Determine the Elasticity of Demand of Cars with respect to price of cars, price of gasoline and the GDP.

A client has provided data on the price of cars, the price of gasoline, the quantity of new cars sold in USA. Gross Domestic Product per capita is also observed. Using regression technique, use the data to estimate the following log linear market demand equation for new cars. ln Q(cars) = 5 - 2.4 ln P(cars) - 1.2 ln P(gasoline) = 0.5 ln (GDP per capita) 1. What is the estimated elasticity of demand for new cars with respect to the price of cars? 2. What is the estimated elasticity of demand for new cars with respect to the price of gasoline? What happens to the quantity of new cars sold if the price of gas increases by 5%? 3. What is the estimated elasticity of demand for new cars wi... click for more

Profit Maximization

The museum’s managers recognize that there are two distinct demand curves for admission. One demand curve applies to people ages 12 to 64, whereas the other is for children and senior citizens. The two demand curves are: PA = 9.6 – 0.08QA PCS = 4 – 0.05QCS, Where PA is the adult price, PCS is the child/senior citizen price, QA is the adult quantity, and QCS is the child/senior citizen quantity. Crowding is not a problem at the museum, so managers consider marginal cost to be zero. a. What price should they charge to each group to maximize profits? b.How many adults will visit the museum? How many children and senior citizens and what are the museum’s profits?

Optimized Order Quanitity

Please see the attached file.