Question
SUBJECT ECON 202 Yangtze is a monopolist with the following long-run cost structure Yangtze is...
SUBJECT ECON 202
- Yangtze is a monopolist with the following long-run cost structure
Yangtze is a monopolist selling books with the following long-run cost structure
Cost Structure for books for Yangtze
|
Books |
Total Costs |
ATC |
AFC |
AVC |
MC |
|
0 |
10,000 |
- |
- |
- |
- |
|
1,000 |
13,000 |
13 |
10 |
3 |
3 |
|
2,000 |
16,000 |
8 |
5 |
3 |
3 |
|
3,000 |
19,000 |
6.33 |
3.33 |
3 |
3 |
|
4,000 |
22,000 |
5.50 |
2.50 |
3 |
3 |
|
5,000 |
25,000 |
5 |
2 |
3 |
3 |
|
6,000 |
28,000 |
4.67 |
1.67 |
3 |
3 |
|
7,000 |
31,000 |
4.43 |
1.43 |
3 |
3 |
Demand for books for Yangtze
|
Price |
Quantity |
Total Revenue |
Marginal Revenue |
|
14 |
1,000 |
||
|
12 |
2,000 |
||
|
10 |
3,000 |
||
|
8 |
4,000 |
||
|
6 |
5,000 |
||
|
4 |
6,000 |
||
|
3 |
7,000 |
- What will be Yangtze’s profit maximizing level of output? At what price will Yangtze price books?
- Assume that Yangtze is considering offering a service Yangtze Prime for $24, which allows individuals to purchase as many books as they would like at $6/book. The company estimates that if they offer Yangtze Prime, they will sell 300 memberships at a price of $24, and those members will purchase a total of $5,000 books. (They conservatively estimate that sales from non-members will be zero.) If the company’s estimates are correct: Should they offer Yangtze prime? What will their profit be if they offer the service?
Homework Answers
Answer #1
a- firm will maximizes its
profit at the quantity where marginal revenue is equal to marginal
cost.
B- total revenue is derived by multiplying price with quantity and total cost is given in the table at 5000 unit.
Not the answer you're looking for?
Similar Questions
The following particulars were obtained from the books of a light Engineering Company for the half...
The following particulars were obtained from the books of a
light Engineering Company for the half year ended 30th September,
2003.
The expenses for 6 months were:
Indirect material. 5,000
Stores overhead. 4,000
Depreciation. 6,000
Motive power. 1,500
Repairs & Maintenance. 1,500
Electric lighting. 800
General overheads. 10,000
Labour welfare. 3000
Worker's training, 700
Additional information:
Particulars
Production Departments
Service Departments
A
B
C
X
Y
Direct wages
7,000
6,000
5,000
1,000
1,000
Direct materials
3,000
2,500
2,000
1,500...
COMPUTE DIRECT LABOR BASED ON THE FOLLOWING: FACTORY SUPERVISOR=$1,000 ASSEMBLY LINE WORKERS=$2,000 AND OFFICE SALARIES=$5,000 COMPUTE...
COMPUTE DIRECT LABOR BASED ON THE FOLLOWING: FACTORY
SUPERVISOR=$1,000
ASSEMBLY LINE WORKERS=$2,000 AND
OFFICE SALARIES=$5,000
COMPUTE DIRECT MATERIALS USED BASED ON THE FOLLOWING:
BEG RM=$1,000
BEG WIP=$2,000
BEG FG=$3,000
END RM=$4,000
END WIP=$5,000
END FG=$6,000
RM PURCHASED=$7,000
COMPUTE COST OF GOODS MANUFACTURED BASED ON THE FOLLOWING:
DL=8,000
BEG WIP=2,000
BEG FG=3,000
MO=9,000
END WIP=5,000
END FG=6,000
DM USED =7,000
COMPUTE MANUFACTURING OVERHEAD:
FACTORY RENT=1,000
FACTORY UTILITIES=2,000
OFFICE DEPRECIATION=4,000
PREPARE THE JOURNAL ENTRY TO RECORD 5,000 RM PURCHASED ON
ACCOUNT
BASED...
COMPUTE DIRECT LABOR BASED ON THE FOLLOWING: FACTORY SUPERVISOR=$1,000ASSEMBLY LINE WORKERS=$2,000 AND OFFICE SALARIES=$5,000 COMPUTE DIRECT...
COMPUTE DIRECT LABOR BASED ON THE FOLLOWING:
FACTORY SUPERVISOR=$1,000ASSEMBLY LINE WORKERS=$2,000 AND OFFICE
SALARIES=$5,000
COMPUTE DIRECT MATERIALS USED BASED ON THE FOLLOWING:
BEG RM=$1,000BEG
WIP=$2,000BEG FG=$3,000
END RM=$4,000
END WIP=$5,000
END FG=$6,000
RM PURCHASED=$7,000
COMPUTE COST OF GOODS MANUFACTURED BASED ON THE FOLLOWING:
DL=8,000
BEG WIP=2,000
BEG FG=3,000
MO=9,000
END WIP=5,000
END FG=6,000
DM USED =7,000
COMPUTE MANUFACTURING OVERHEAD:
FACTORY RENT=1,000
FACTORY UTILITIES=2,000
OFFICE DEPRECIATION=4,000
PREPARE THE JOURNAL ENTRY TO RECORD 5,000 RM PURCHASED ON
ACCOUNT
BASED ON 8 ABOVE,...
Ferris Company began January with 4,000 units of its principal product. The cost of each unit...
Ferris Company began January with 4,000 units of its principal
product. The cost of each unit is $6. Merchandise transactions for
the month of January are as follows:
Purchases
Date of Purchase
Units
Unit Cost*
Total Cost
Jan. 10
3,000
$
7
$
21,000
Jan. 18
4,000
8
32,000
Totals
7,000
53,000
* Includes purchase price and cost of freight.
Sales
Date of Sale
Units
Jan. 5
2,000
Jan. 12
1,000
Jan. 20
3,000
Total
6,000
5,000 units were on...
In this Assessment, you will apply your understanding of comparative advantage as a foundation for trade,...
In this Assessment, you will apply your understanding of
comparative advantage as a foundation for trade, along with your
understanding of the crucial concept of changes in supply and
demand equilibrium. You will also provide a rational approach on
how cultural differences and the downfalls of stereotyping people
from foreign cultures and misunderstanding their cultural attitudes
affect international trade. This Assessment requires you to use the
Microsoft® Word® template provided to compose a combination of
short paragraph answers, computations, and...
1. For a perfectly competitive firm in the short run, the ____________ price is at minimum...
1. For a perfectly competitive firm in the short run,
the ____________ price is at minimum average variable cost and the
break-even price is at minimum ________ cost.
a. Shut-down: Marginal
b. Shut-down: Average
c. Operating: Average
d. Operating: Marginal
2. The short-run supply curve for a perfectly
competitive firm is a _______ line at zero quantity if the price is
below minimum average variable cost but is the marginal cost if the
price is at or above minimum...
can you please answer question 14-17. thank you, please show your work. Using the following information...
can you please answer question 14-17. thank you, please
show your work.
Using the following information find the ratios listed:
Hamilton Company
Comparative Balance Sheets
December 31, 2018 and December 31, 2019
Assets
2018
2019
Difference
Cash
15,000
47,000
32,000
Accounts Receivable
55,000
47,000
(8,000)
Inventory
110,000
144,000
34,000
Prepaid Expenses
5,000
1,000
(4,000)
Long term investments
127,000
115,000
(12,000)
Land
55,000
55,000...
Can you please answer question 5-8. Thank you please show your work. Using the following information...
Can you please answer question 5-8. Thank you please
show your work.
Using the following information find the ratios listed:
Hamilton Company
Comparative Balance Sheets
December 31, 2018 and December 31, 2019
Assets
2018
2019
Difference
Cash
15,000
47,000
32,000
Accounts Receivable
55,000
47,000
(8,000)
Inventory
110,000
144,000
34,000
Prepaid Expenses
5,000
1,000
(4,000)
Long term investments
127,000
115,000
(12,000)
Land
55,000
55,000...
Which of the following costs are always irrelevant in decision making? A. avoidable costs B. sunk...
Which of the following costs are always irrelevant in decision
making?
A.
avoidable costs
B.
sunk costs
C.
fixed costs
D.
opportunity costs
Lee Company's standards for the most recent period are given
below. Fixed and variable manufacturing overhead costs are applied
to products on the basis of machine hours. The denominator volume
of machine hours is 9,000.
Standard Quantity
or Hours per unit
Standard Price
or Rate per unit
Standard Cost
per unit
Direct Materials
3 feet
$6 per...
Tom, an ornithologist, had been debating for years whether to venture out on his own and...
Tom, an ornithologist, had been debating for years whether to
venture out on his own and operate his own business. He had
developed a lot of solid relationships with clients and he believed
that many of them would follow him if he were to leave his
current employer. As part of a New Year’s resolution, Tom decided
he would finally do it. Tom put his business plan together
and, on January 1 of this year, Tom opened the doors of...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 29 minutes ago
asked 42 minutes ago
asked 56 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 2 hours ago
asked 2 hours ago
asked 2 hours ago
asked 2 hours ago