# Calculate the price, quantity, and profit if:

Calculate the price, quantity, and profit if:

Question 1

Suppose the number of firms you compete 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].

Question 2

An amusement park, whose customer set is made up of two markets, adults and children, has developed demand schedules as follows:

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

Price (\$)

Quantity

Children

5

15

20

6

14

18

7

13

16

8

12

14

9

11

12

10

10

10

11

9

8

12

8

6

13

7

4

14

6

2

Calculate the price, quantity, and profit if: The amusement park charges a different price in the adult market

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

Price

Quantity

Total Revenue

Marginal Revenue

Marginal Cost

Total Cost

MR-MC

Profit

84

5.00

30.00

54.00

91

7.00

5.00

35.00

2.00

96

5.00

5.00

40.00

0.00 