Econ Questions

Question1 A) given the information below what is the best price they should put on all the cars assuming every er pays the same price and how much profit will they make? B) is there a better way to make profits and how much profit could they make? why might this strategy be difficult to use? The firm cant change their costs. But they could use a different pricing scheme not charging every customer the same price. Fixed cost for business is $4000 Variable cost is $20000 for each car they get from the manufacturer. They anticipate the following customers. Ms. Rich would pay up to $30000 Mr. Upper Middle would pay up to $26000 Ms. Middle would pay up to $22000 Mr. Lower Middle would pay up to $18000 Ms. Poor would pay up to $16000 Question 2 Complete a table for Q Price TC MC MR and profits. Start the price at the number of letters in your first and last names combined for Q = 1 and then reduce the price as Q increases. (You are price-making monopoly) For costs begin with TC = 6 at Q = 1 then you may use any numbers you like for costs. You may need to play around with the numbers to make this work out. Show that MR = MC at profit maximization. Requirements: as long as it answers the question | .doc file Imagine that you are advising a small new car dealership. They ask: Imagine that you are advising a small new car dealership. They ask: