bba 2501 micoreconmics

Orville Stewart BBA 2501

Unit II Assignment Worksheet

This worksheet is intended to help you develop the information you will use to complete your Unit II Assignment.

Completing only this worksheet does not constitute completion of the Unit II Assignment. You need to complete all parts of the assignment, which also include writing an essay about the information you obtain in this worksheet. You will copy and paste your essay at the end of this document where indicated, and then upload your assignment via SafeAssign.

Instructions: 1. Complete the Unit II Worksheet. 2. Use your Unit II Worksheet responses to help you formulate your ideas for writing your

essay; you are expected to expand on these questions when writing your essay. 3. Include your graphs in the areas indicated in this worksheet. 4. Copy and paste your essay in to this worksheet, then upload the entire assignment via

SafeAssign.

Part 1 Given the quantity of total movie tickets and total concession stand items consumed in a month and the total utility derived at Ruby Red Movie Theater for each, calculate the marginal utility and the marginal utility per dollar for movie tickets and average concession stand items.

Step 1: Calculate marginal utility and marginal utility per dollar for movie tickets.

Quantity of Tickets Consumed

Total Utility

Marginal Utility

Movie Ticket Price

Marginal Utility Per Dollar for Movie Tickets

0 0 --- --- ---

200 150 0.75 $10.00 0.075

400 275 0.625 $10.00 0.063

600 375 0.5 $10.00 0.05

800 450 0.375 $10.00 0.038

1,000 500 0.25 $10.00 0.025

1,200 525 0.125 $10.00 0.013

1,400 525 0 $10.00 0

Step 2: Calculate marginal utility and marginal utility per dollar for concession stand items.

Quantity of Concession Stand Items Consumed

Total Utility

Marginal Utility

Average Item Price

Marginal Utility Per Dollar for Concession Items

0 0 --- --- ---

400 200 0.05 $15.00 0.033

800 375 0.438 $15.00 0.029

1,200 525 0.375 $15.00 0.025

1,600 650 0.312 $15.00 0.021

2,000 750 0.25 $15.00 0.167

2,400 825 0.188 $15.00 0.013

2,800 875 0.125 $15.00 0.008

Part 1 Question 1: What quantity combination of movie tickets and concession stand items would maximize utility?

Your Answers: 1200

Quantity of Movie Tickets 2400

Quantity of Concession Stand Items

Part 1 Question 2: What is the price of movie tickets and average price of concession stand items?

Your Answers: 10

Movie Ticket Price $15

Concession Stand Items Average Price

Part 2 Given the quantity of total movie tickets and total concession stand items consumed in a month and the total utility derived at Ruby Red Movie Theater for the change in movie ticket prices, calculate the marginal utility and the marginal utility per dollar for movie tickets and concession stand items.

Step 1: Calculate marginal utility and marginal utility per dollar for movie tickets.

Quantity of Tickets Consumed

Total Utility

Marginal Utility

Movie Ticket Price

Marginal Utility Per Dollar for Movie Tickets

0 0 --- --- ---

200 150 0.75 $12.00 0.063

400 275 0.625 $12.00 0.052

600 375 0.5 $12.00 0.042

800 450 0.375 $12.00 0.031

1,000 500 0.25 $12.00 0.021

1,200 525 0.125 $12.00 0.010

1,400 525 0 $12.00 0

(Continue on next page)

Step 2: Calculate marginal utility and marginal utility per dollar for concession stand items. (Note: The information here has not changed from Part 1, Step 2.)

Quantity of Concession Stand Items Consumed

Total Utility

Marginal Utility

Average Item Price

Marginal Utility Per Dollar for Concession Items

0 0 --- --- ---

400 200 0.5 $15.00 0.033

800 375 0.438 $15.00 0.029

1,200 525 0.375 $15.00 0.025

1,600 650 0.313 $15.00 0.021

2,000 750 0.25 $15.00 0.017

2,400 825 0.188 $15.00 0.013

2,800 875 0.125 $15.00 0.008

Part 2 Question 1: What quantity combination of movie tickets and concession stand items would maximize utility now that the price of movie tickets has changed?

Your Answers:

1000 Quantity of Movie Tickets

1600 Quantity of Concession Stand Items

Part 2 Question 2: What is the price of movie tickets? Your Answer:

12 Movie Ticket Price

Part 3 Given the total quantity of movie tickets and total concession stand items consumed in a month and the total utility derived at Ruby Red Movie Theater for the change in concession stand prices, calculate the marginal utility and the marginal utility per dollar for movie tickets and concession stand items.

Step 1: Calculate marginal utility and marginal utility per dollar for movie tickets. (Note: The information here is the same as in Part 1, Step 1.)

Quantity of Tickets Consumed

Total Utility

Marginal Utility

Movie Ticket Price

Marginal Utility Per Dollar for Movie Tickets

0 0 --- --- ---

200 150 0.75 $10.00 0.075

400 275 0.625 $10.00 0.063

600 375 0.5 $10.00 0.05

800 450 0.375 $10.00 0.038

1,000 500 0.25 $10.00 0.025

1,200 525 0.125 $10.00 0.013

1,400 525 0 $10.00 0

(Continue on next page)

Step 2: Calculate marginal utility and marginal utility per dollar for concession stand items.

Quantity of Concession Stand Items Consumed

Total Utility

Marginal Utility

Average Item Price

Marginal Utility Per Dollar for Concession Items

0 0 --- --- ---

400 200 0.5 $20.00 0.025

800 375 0.438 $20.00 0.022

1,200 525 0.38 $20.00 0.019

1,600 650 0.313 $20.00 0.016

2,000 750 0.25 $20.00 0.013

2,400 825 0.188 $20.00 0.009

2,800 875 0.125 $20.00 0.006

Part 3 Question 1: What quantity combination of movie tickets and concession stand items would maximize utility now that the average price of concession items has changed?

Your Answers:

1000 Quantity of Movie Tickets

400 Quantity of Concession Stand Items

Part 3 Question 2: What is the average price concession stand items? Your Answer:

20 Concession Stand Items Average Price

Part 4 Answer the following from the calculations you made above:

Step 1: In regard to movie tickets, report the price and quantity you calculated in Questions 1 and 2 from Parts 1 and 2.

Movie Tickets Price Quantity

Part 1: Question 1 and Question 2 $10 1200

Part 2: Question 1 and Question 2 $12 1000

Task: Graph the demand curve for movie tickets from the information above. Provide a copy of your graph in the box below. You can use a computer program such as Microsoft Excel or even draw the demand curve for movie tickets by hand, then take a clear, easy-to-read photo of it and insert it. Be sure to resize your graph or photo so that it completely fits in the box.

Step 2: In regard to concession stand items, report the price and quantity you calculated in Questions 1 and 2 from Parts 1 and 2.

Concession Stand Items Average Price Quantity

Part 1: Question 1 and Question 2 $15 2400

Part 2: Question 1 and Question 2 $15 1600

Task: Graph the demand curve for concession stand items from the information above. Provide a copy of your graph in the area below. You can use a computer program such as Microsoft Excel or even draw the demand curve for concession stand items by hand, then take a clear, easy-to-read photo of it and insert it. Be sure to resize your graph or photo so that it completely fits in the box.

Part 5 Given the price and quantity information below, graph the supply curve for movie tickets and concession stand items on separate graphs.

Step 1: Graph the supply of movie tickets given the prices and quantities supplied below.

Movie Ticket Prices and Quantity Supplied

Movie Ticket Price

Quantity Supplied of

Movie Tickets $2 1,800 $3 1,800 $4 1,800 $5 1,800 $6 1,800 $7 1,800 $8 1,800 $9 1,800

$10 1,800 $11 1,800 $12 1,800 $13 1,800 $14 1,800 $15 1,800

Insert graph here: To create your graph, you can use a computer program such as Microsoft Excel or even draw the demand curve for movie tickets by hand, then take a clear, easy-to- read photo of it and insert it. Be sure to resize your graph or photo so that it completely fits in the box.

Part 5 Question 1: Why is the quantity supplied of movie tickets the same regardless of the price of movie tickets? Enter your response in the box below.

When there is a constant amount of ticket supply by the providers, prices will not changes. It is not possible to alter the quantity, which has to do with the capacity constraint.

Step 2: Graph the supply of concession stand items given the prices and quantities supplied below. Concession Stand Item Prices and Quantity Supplied

Average Concession Stand Price

Quantity Supplied of Concession Stand Items

$1 500 $2 700 $3 900 $4 1,100 $5 1,300 $6 1,500 $7 1,700 $8 1,900 $9 2,100

$10 2,300 $11 2,500 $12 2,700 $13 2,900

Draw or insert graph here: (Make sure your graph fits entirely in the box.)

Part 6 Graph the supply and demand for movie tickets and concession stand items.

Step 1: Graph the supply and demand for movie tickets on one graph.

Draw or insert graph here: (Make sure your graph fits entirely in the box.)

Step 2: Estimate the equilibrium price and quantity for movie tickets:

Equilibrium Price: ___________$1__________

Equilibrium Quantity: ____________1800____________

Step 3: Graph the supply and demand for concession stand items on one graph.

Draw or insert graph here: (Make sure your graph fits entirely in the box.)

Step 4: Estimate the equilibrium price and quantity for concession stand items:

Equilibrium Price: ______________$15_____________

Equilibrium Quantity: __________3,000______________

Supply and Demand

Orville R Stewart

Columbia Southern University

Principles of Microeconomics, BBA 2501

Professor Hovey

08/08/2021

Supply and Demand

Whether locally or globally, any business will see a change in demand and supply, and

Ruby Red Theater is no exception.. However, those changes usually occur for many different

reasons. And for the Ruby Red Theater manager, it was no different. The manager notices a

decrease in items from the concession stand and movie tickets purchased for the theater for the

last year. This decrease in sales had some concern for the manager, so he seeks advice from a

private economic consultant. For any business, the supply and demand charts are vital when

looking for an insight to help with the visual graph, and so was it for Ruby Red Theater.

Management will use this visual graph to determine their business pattern. The charts are to

understand the impact on the business better. It is vital to understand the law of supply and

demand.

By graphing the supply and demand by an individual, there will be factors to consider.

When analyzing the law of demand, it explained that the number of goods purchased by a

customer would vary over a period.. According to (The Law of Supply and Demand, 2000),

"Any given moment, a too high price will leave disappointed would-be sellers with unsold

goods, while a too low price will leave disappointed buyers without the goods they wish to buy."

When analyzing the data for Ruby Red Theater, The best recommendation is that the managers

use the marginal utility and marginal utility for each dollar of their movie tickets and concessions

stand purchase because there is a change in the movie tickets price increases from $10 to $12.

This increase makes the quantity demand decrease from the numbers from 1200 to 1000 in

movie tickets. But on the other hand, this will allow the concession demand not to change, only

if the average price stays at 15 dollars. Furthermore, the chart data is vital when you want to

know the relationship between the price and the demand for the firm.

When economic chart the data using the demand curve, this shows the relationship

between the price of the good and how much of a product consumers are willing to buy at a cost

(www.fee.com). Other factors than the price may also affect the demand for the movie tickets,

and concession items include income and substitutes. When there is a change in customers'

income, environmental changes will also affect supply and demand(www.fte.org). When the

demand for movie tickets decreased because there were changes in the price. But when the price

increase but does not fit into a budget for a customer, this will result in them restrain from

visiting a movie theater and buying concession items. When customers have a low week in

wages, they will often save their money. But if real income increases, then there will be

purchasing power. But when customers stay home and do not go out to the movie theater, this

will result in the movie tickets decrease due to substitutes. There are many substitutes for visiting

the movie theater, for example, streaming devices and applications like Netflix. When looking at

the theater, concession items would decrease if the capacity is low in the movie theater. Most

customers typically buy concession items, like popcorn and drinks to eat while watching the

movie. Concession items will receive a direct price impact also. When concession items price

increase, consumers will think twice about purchasing a drink or snacks. A shift will make the

demand curve occur, but any other factor other than a price and the demand of products will be

affected. Then the consideration of the law of supply will apply.

The Law of Supply for producers stated. So that producer can directly sell related to its

price. When charting the law and supply, the good thing for a firm is that the data will be

captured on a supply curve. But the Supply Curve will experience shifts and movements because

of factors like resource price and price of the other goods(www.fee.com). If there is an increase

in the resource price, then the cost will increase for producing the item and decrease the supplied

amount. But if there is no movement in the movie tickets prices, the producer sells a constant

amount of movie tickets. Furthermore, it may not be possible to change the quantity because

capacity is a constraint. When the Ruby Red Theater sees an increase in their concession items

sales, there is an increase in items sold. For this to happen! It is because the producer is willing

to produce and supply the concession that will increase profit for the business. When you have

the demand and supplies matched, then equilibrium will occur(McEachern, 2019). The cost of

Ruby Red Theater tickets will affect the equilibrium price by decreasing on an average of $1 or

$2 and having $1800 in the theater movie tickets. The equilibrium price then will affect the

concession items to occur at 15 dollars. Also, there will be an average of 3000 concessions items.

Also, there will be an average of 3000 concessions items. By this happening, this tells you that

the market is stable. But there will also be a shift with the supply and demand, but only if there is

movement other than price when there is a decrease in supply and demand. The shift will be

toward the left on the graph for supply and demand. Also, equilibrium quantity decreases.

Demand increase and supply decrease will increase the equilibrium price. Furthermore, a

decrease in equilibrium price occurs, resulting in the demand decrease and supply increase

The fact is that supply and demand affect all businesses. And Ruby Red Theater saw a

demand for movie tickets and also concession items over the past year. Therefore, when charting

patterns that include quantity and price, there is a factor that will determine substitution, price

increases, and household income. Household members will limit their spending when there is a

price increase. But when there is an increase in household income, the demand for other

products, like movie tickets and concession items, will gradually rise.

Reference

Demand, Supply, and the Market; Retrieved from: ww.fte.org/teachers/teacher-resources/lesson

McEachern, W. A. (2019). Micro ECON6: Principles of microeconomics. Cengage Learning.

https://online.vitalsource.com/#/books/9781337671828

The Law of Supply and Demand: Retrieved from: www. fee.org/articles/the-law-of-supply-and-

demand.