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You run a chain of movie theaters, so you commission a marketing study that categorizes your potential customers into 10 equal-sized groups according to what they’re willing to pay for a movie ($10, $9, $8, $7, $6, $5, $4, $3, $2, $1). It turns out that the low-value customer groups, those with values ($5, $4, $3, $2, $1), are all over 65 years old. All the costs of exhibiting movies are fixed except for the $3.50 royalty payment you must make to the film distributor for each ticket sold. What price should you charge for movie tickets? Should you offer senior citizen discounts? If so, how much?
How will each affect equilibrium price and equilibrium quantity in a competitive market? Will price and quantity rise, fall, or be unchanged? Based on the magnitudes of the shifts, will the answers be indeterminate?
Determine if each of the following value functions is loss averse. (a) v(x) = 0.25x for x > 0 and v(x) = 0.5 for x ≤ 0 (b) v(x) = √x for x > 0 and v(x) = 0.5x for x ≤ 0 (c) v(x) = ex for x > 0 and v(x) = −√−x for x ≤ 0 (d) v(x) = √x for x > 0 and..
Suppose the employees of Starbucks in China are paid 8 Yuan per hour and a cup of coffee is priced at 8 Yuan. If Starbucks is maximising its profit, a what is the value of marginal product of labour (VMPL) per hour of the last worker employed by Star..
What is the total market demand for polyglue at the price established by Alchem in Part (a). How much of the total demand do the follower firms supply?
Using a wholesale cost of $4 per case in each state, calculate the breakeven output quantities for each alternative.
Describe the impact of an expansionary fiscal policy in an open economy using the ISLM model and the interest-rate parity relationship. Explain what happens to output, the interest rate and the exchange rate, using the appropriate graphs to illustrat..
Firm 1 and Firm 2 compete in an industry and must decide whether to introduce an upgrade to their existing products. The nature of the strategic interaction is described by the game box, where (Y) means “upgrade” and (N) means “do not upgrade”. Draw ..
When there is an increase in the expected rate of inflation, will the nominal and real interest rates on new loans increase, decrease, or stay constant?
The damage (to cigarette makers) is generally under control." Illustrate what action do you suppose the cigarette companies took to avoid bankruptcy.
q.the market for water in urban areas in australia is often dominated by one provider for example sydney water in the
The New York Times (Nov. 30, 1993) reported that "the inability of OPEC to agree last week to cut production has sent the oil market into turmoil...[leading to] the lowest price for domestic crude oil since June 1990." Why were the members of OPEC tr..
Many people enjoy the excitement of living and working in a foreign country, but many others do not want to work in a foreign country, particularly if an assignment is perceived to be very long term or permanent.
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