I NEED ALL OF THESE PROBLEMS SOLVED Use the following for questions 23.25. You a
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I NEED ALL OF THESE PROBLEMS SOLVED
Use the following for questions 23.25. You are responsible for organizing the 2nd Annual Economics Mustache Competition benefitting the "Send Dr. Brown's family to Hawaii" charity. As part of this fund raiser, faculty and economics students can nominate other faculty and students to grow a mustache unless the nominated individual chooses to "buyout". A "buyout" requires the nominated faculty and student to pay a certain amount to relieve him/her of the obligation of growing a rm Last year the buyout price was $30 for everyone. This year, since you mastered Econ 3310, you decide to use 3rd degree price discrimination for these "buyouts" and set the price of the buyout for faculty different than the price for students. Also, assume you know that the demand for student buyouts (DS) and the demand for faculty buyouts (DF) are as depicted below Studena Demand Faculty Dem 200 175 150 125 50 40 30 Ds i 20 10 o S 10 15 20 25 30 35 0 10 15 20 25 30 35 40 23. What is the total amount earned for charity if you follow last year's pricing strategy and price $30.00 for both markets (you may assume there are no costs)? C. $300 d. $900 a. $600 $720 24. If you wanted to maximize the amount raised for charity, what price should you set for a student buyout (pS) and what price should you set for a faculty buyout (p may assume MC-0)? F) (you b. ps $30: pr $30 OP-$3P100Not sure d. ps- $100pr $30 25. What will happen to overall welfare in this market by using price discrimination as opposed to $30 charged in both markets? a. it will go down because the faculty has to pay more b. it will go up, more carned for charity c. it is hard to tell d. it will go down even though total earned for charity incrieasesExplanation / Answer
23)
Single price is set for both market:
Amount of first market = TR
= 30 *15 – 0
=450
Second market = 9*30
= 270
Total Earning = 270+450
=720
Right answer is : (B)
24)
When different price are set; MR = MC
First market = $ 30
Second market = 100
Right answer is ( c)
25)
When price discrimination is practiced, second market consumers are supposed to pay their higher price. Hence their CS falls.
Right answer is (A)
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