2 (W5LO2). The table provides information on the supply schedules of hot air bal
ID: 1107075 • Letter: 2
Question
2 (W5LO2). The table provides information on the supply schedules of hot air balloon rides by Xavier, Yasmin, and Zack, who are the only sellers in the market. Quantity supplied Price (dollars Zack 20 15 10 Xavier Yasmin 100 20 15 10 15 10 70 Part 1. What is the marginal social cost when the total number of rides is 60? Part 2. When the total number of rides is 60, calculate the number of rides for each seller? Part 3. When the total number of rides is 60, what is the marginal social cost for each firm?Explanation / Answer
We have the following information
Price ($ per ride)
Quantity Supplied (rides per week)
Xavier
Yasmin
Zack
Total
100
30
25
20
75
90
25
20
15
60
80
20
15
10
45
70
15
10
5
30
60
10
5
0
15
50
5
0
0
5
40
0
0
0
0
In the present case the price of the ride is equal to the marginal social cost.
Part 1) As can be seen from the above table the total number of rides is 60 for price $90. So, the marginal social cost will be $90.
Part 2) The number of rides for each seller is following
Xavier = 25
Yasmin = 20
Zack = 15
Part 3) Marginal social cost for each firm is also $90.
Price ($ per ride)
Quantity Supplied (rides per week)
Xavier
Yasmin
Zack
Total
100
30
25
20
75
90
25
20
15
60
80
20
15
10
45
70
15
10
5
30
60
10
5
0
15
50
5
0
0
5
40
0
0
0
0
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