Pay a royalty to ?lm studios

Assignment Help Business Management
Reference no: EM131956889

The perfectly competitive videotape copying industry is composed of many ?rms that can copy ?ve tapes per day at an average cost of $10 per tape. Each ?rm must also pay a royalty to ?lm studios,and the per ?lm royalty rate (r) is an increasing function of total industry output (Q):

r = 0:002Q.

Demand is given by

Q = 1,050 - 50P

a) Suppose that the government institutes a $5.50 per-?lm tax on the?lm copying industry. Assuming that the demand for copied ?lms is that given above, how will this tax affect the market equilibrium?

b) How will the burden of this tax be allocated between consumers and producers? What will be the loss of consumer and producer surplus?

c) Show that the loss of producer surplus as a result of this tax is borne completely by the ?lm studios. Explain your result intuitively.

Reference no: EM131956889

Questions Cloud

The spot price of the market index rises : What is the profitor loss to a short position if the spot price of the market index rises to $920 at the expiration date?
Explain the aspects of organizational design : Final Project Submit an APA style, 600-900 word (two- to three-page) excerpt explaining which aspects of organizational design and redesign apply.
Revenue and cost functions under monopolistic competition : Question: A firm had the following Revenue and Cost functions under monopolistic competition:
The interest payment and how much of pays against principal : In the 20th payment, how much of it is the interest payment and how much of it pays against the principal?
Pay a royalty to ?lm studios : Each ?rm must also pay a royalty to ?lm studios,and the per ?lm royalty rate (r) is an increasing function of total industry output (Q):
The percentage change in price for zero coupon bond : What is the percentage change in price for a zero coupon bond if the yield changes from 7?% to 8.5%?
Use of coupons by grocery stores : Darnell and Janet are debating the use of coupons by grocery stores. Darnell says, "The use of coupons in grocery stores represents a means of price
Perfectly competing supermarkets : A small town is served by many perfectly competing supermarkets, which have constant marginal cost.
Use the same criteria as that used for the firm ceo : your committee was asked to set the compensation for the three division managers, would you use the same criteria as that used for the firm’s CEO?

Reviews

Write a Review

Business Management Questions & Answers

  What type of sampling is the study below provide an

what type of sampling is the study below. provide an analysis and the advantages and disadvantages of this approachsix

  Short business report to the trustees of theatre royal

You are required to write a short business report to the Trustees of the locally based Theatre Royal (Plymouth, UK). The report should analyse the current business environment

  Define the research questions for the identified problem

Identify a business research topic, define the research questions for the identified problem or opportunity, select the appropriate research methodologies and techniques to use for the research project, describe the research process, describe data..

  Determine the best strategy to deploy to embrace

HAT202 The Hospitality and Tourism Market Business Case Study Assignment. Your group has been employed by park management to help them find possible solutions, especially in the future marketing for the venue. In particular, management is strugglin..

  Decide that for various reasons

The management might decide that for various reasons it would like to change the gearing of the company. How can the management reduce and increase the gearing?

  Research analysis for business

The purpose of this assignment is the creation of a research analysis. Every day, consumers make millions of decisions that impact.

  Factors that contribute to an organizational culture

What are the factors that contribute to an organizational culture that supports making decisions at the lowest level possible and empowerment?

  Power and politics in organizations

Power and Politics in Organizations - Looking for ideas on how to compare and contrast power and politics in organizations

  Outsourcing transfers some of the enterprise''s internal

For the reason that outsourcing transfers some of the enterprise's internal processes as well as resources to outside vendors, outsourcing

  What is the total amount due to pay off the loan

How much interest will Paige save by paying off the loan early? What is the total amount due to pay off the loan?

  Calculate the macaulay duration

A $1,000 bond that pays semi-annual coupons at 5% redeems at par in exactly 3 years from now. Calculate the Macaulay Duration (in years), if the yield to maturity is currently 6%.

  Describe the sampling method used in this study

Describe the sampling method used in this study. Distinguish among population, sample, and sampling methods in your response.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd