Management at the macho burrito hacienda has completed a

Assignment Help Econometrics

Reference no: EM13375626

Management at the Macho Burrito Hacienda has completed a study of weekly demand for its super-supremo-dos-nacho-double-grande-mucho-muncho burritos. The study revealed that the demand for the four pound cheese-stuffed, bacon-smothered, grease-dripping, colossal-sized macho burrito meal (X) is given by the following equation:

Q_X = 1,320 -1,000 P_X + 700 P_T + 7 I + 200 A

where Q_X= the number of the four-pound macho burrito meals sold

P_X = the price of the four-pound macho burrito meals

P_T= the price of bacon cheeseburger double-decker tacos

I = per capita income

A = Advertising expenditure

Currently P_X = 5, P_T = 2, I = 40 and A = 20.

(a) Calculate the elasticity of demand for burrito meals with respect to the price of burritos, the price of tacos, and per capita income.

(b) Should the Macho Burrito Hacienda raise the price of its burrito meals to increase Total Revenue? Why or why not?

(c) Calculate consumer surplus at the Revenue-maximizing price.

(d) If the cost per burrito is $3 and Macho Burrito Hacienda behaves as a monopolist, how many burrito meals will be sold and at what price?

Reference no: EM13375626

Questions Cloud

3 assume a monopolist who sells a product with a total cost : 3. assume a monopolist who sells a product with a total cost function c -100q 15q2. the market demand is given by the

A machine which has a 10 year life will cost 11000 now with : a machine which has a 10 year life will cost 11000 now with annual operating costs of 500 the first year and increasing

There are n ge 3 doctors who have created a partnership in : there are n ge 3 doctors who have created a partnership. in each period each doctor decides how hard to work. let eti

The demand for good x is given by the : the demand for good x is given by the following

Management at the macho burrito hacienda has completed a : management at the macho burrito hacienda has completed a study of weekly demand for its

You are a manager in a perfectly competitive market the : you are a manager in a perfectly competitive market. the price in your market is 45. your total cost curve is cq 10

Give the journal entry to charge standard overhead costs to : give the journal entry to charge standard overhead costs to work in process and record overhead variances for the month

The demand for the bus 207 textbook qx is given by the : the demand for the bus 207 textbook qx is given by the following equationqx 100 - 5.0 px 1.5 py - 2 pz 4.7

The tricities bus company is a regional bus line providing : the tricities bus company is a regional bus line providing transit service between coquitlam port moody and port

User Account

All Pages