Question

There are 1000 people in the small town of Pohdunk, who want to have a fireworks display on the 4th of July. Willingness to pay for each of the 100 individuals is P = 5.52 – 0.01Q, where Q is the number of colorful exploding rockets that shoot off during the display. The cost of each colorful exploding rocket is $20.

a) How many rockets should the town of Pohdunk purchase for its fireworks display?

b) How much should the town charge each individual in order to maximize consumer surplus?

c) Explain why it is unlikely that the optimal amount of rockets will be purchased no matter what system of payment is used.

Answer #1

There are 1,000 people in the town of Wilmington, who want to
have a fireworks show on the 4th of July. Willingness to pay for
each of the 100 individuals is P = 5.52 - 0.01Q, where Q is the
amount of exploding rockets that shoot off during the show. The
cost of each exploding rocket is $20.
1. How many rockets should the town of Wilmington purchase for
its fireworks show?
2. How much should the town of Wilmington...

You own the only video store in town that specializes
in foreign classic movies. you have estimated that your average
customer's demand per year is Q=20-2P, and you know that the
marginal cost of each rental is $1. how much should you charge for
an annual membership in order to extract the entire consumer
surplus via an optimal two part pricing strategy?

Delta airlines case study
Global strategy. Describe the current global
strategy and provide evidence about how the firms resources
incompetencies support the given pressures regarding costs and
local responsiveness. Describe entry modes have they usually used,
and whether they are appropriate for the given strategy. Any key
issues in their global strategy?
casestudy:
Atlanta, June 17, 2014. Sea of Delta employees and their
families swarmed between food trucks, amusement park booths, and
entertainment venues that were scattered throughout what would...

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