#75386 Managerial Economics and Globalization

Suppose your company runs a shuttle business of a hotel to and from the local airport. The costs for different customer loads are:

1. Customer: $30

2. Customers: $32

3. Customers: $35

4. Customers: $38

5. Customers: $42

6. Customers: $48

7. Customers: $57

8. Customers: $68

1. What are your marginal costs for each customer load level? Provide Chart

2. If You are compensated $10 per ride, what customer load would you choose

Problem 2. Suppose your company runs a shuttle business of a hotel to and from local airport. The cost for different customer loads are:

1. Customer: $30

2. Customers: $32

3. Customers: $35

4. Customers: $38

5. Customers: $42

6. Customers: $48

7. Customers: $57

8. Customers: $68

If you are compensated $10 per ride, what customer load would you choose?

MR greater than or equal to 1 MC You will serve 7 customers

MC Less Than MR You will serve 10 customers

MC less than MR You will serve 9 customers

MR equal to MR You will serve 7 customers

Problem 3. Suppose the number of firms you complete with has recently increased. You estimated that as a result of the increased competition, the demand elasticity has increased from -2 to -3, i.e., you face more elastic demand. You are currently charging $10 for your product. If demand elasticity is -3, you should charge [x].

Problem 4. Price Discrimination – An amusement park. Whose customer set is made up of two markets, adults and children, has developed demand schedule as follows.

The marginal operating cost of each unit of quality is $5. Because marginal cost is a constant, so is average variable cost. Ignore fixed costs. The owner of the amusement part want to maximize profits.

Calculate the price, quality, and profit if: The amusement park charges a different price in a the adult market. Please express your answers for price and profit in whole dollars.

Please use whole numbers for Quantity (i.e., 10, 27. 4)

Problem 5. An Amusement park., whose customer set is made up two markets, adults and children, has development demand schedule as follows

The marginal operating cost of each unit of quality is $5. Because marginal cost is a constant, so is average variable cost. Ignore fixed costs. The owner of the amusement part want to maximize profits.

Calculate the price, quality, and profit if: The amusement park charges a different price in the Child’s market. Please express your answers for price and profit in whole dollars.

Please use whole numbers for Quantity (i.e., 10, 27. 4)

Problem 6 - An Amusement park., whose customer set is made up two markets, adults and children, has development demand schedule as follows

The marginal operating cost of each unit of quality is $5. Because marginal cost is a constant, so is average variable cost. Ignore fixed costs. The owner of the amusement part want to maximize profits.

Calculate the price, quality, and profit if: The amusement park charges the same price for two markets combined.. Please express your answers for price and profit in whole dollars.

Please use whole numbers for Quantity (i.e., 10, 27. 4)

Problem 7 – Explain the difference in the profit realized under two situations (the price in each market or in two markets combined). (essay)

Make sure you include the profit with and without price discrimination. In Your answer.

Problem 8 – Time Warner could offer the History Channel (H) and Showtime (S) individually or as a bundle of both. Suppose the reservation prices of customers 1 and 2 (the highest prices they are willing to pay) are the cost of Time Warner is $1 per customer for licensing fee.

Preferences

Should Time Warner bundle or sell separately? Your answer needs to include the unbundled and bundle profits.

Problem 9: Suppose Time Warner could sell Showtime for $9 and History Channel for $8, while making Showtime-History bundle available for $13. Should it use mixed bundling, i.e., sells products both separately as a bundle? (essay)

You answer must include the profit with mixed bundling.