(Solution) If A Firm Is Selling A Product In Two Markets, A And B, And The Marginal Revenue In A Is $25 And The Marginal Revenue In B Is $20, The Firm Should A.... | Snapessays.com


(Solution) If a firm is selling a product in two markets, A and B, and the marginal revenue in A is $25 and the marginal revenue in B is $20, the firm should a....


1. If a firm is selling a product in two markets, A and B, and the marginal

 

revenue in A is $25 and the marginal revenue in B is $20, the firm should

 

a. charge a higher price in A where MR is higher

 

b. charge a lower price in B where MR is lower

 

c. sell more in B and less in A

 

d. sell more in A and less in B

 

 

2. The wildTime Bar offers female patrons a lower price for a dring that

 

male patrons. The bar will maximize profit by selling a total of 200 drinks

 

per night. At the current price prices male customers buy 150 drinks,

 

while female customers buy 50 drinks. The marginal revenue from the

 

last drink sold to a male customer is $1.50, and while teh marginal

 

revenue form the last marginal revenue from the last drink sold to a

 

female customer is $0.50

 

a. should lower the price for male customers and rasise the price for

 

female customers.

 

b. should lower the price for female customers and raise the price for

 

male customers

 

c. should charge the same price regardless of gender

 

d. is maximinzing profit, should keep selling $150 drinks to male

 

customers and 50 drinks to female customers.

 

3. Mega Media Cable Scenario: Mega Media Cable TV is able to purchase

 

an exclusive right to sell a premium sport channel in its market area. Let's

 

assume that Mega Media pays $100,000 a year for the exclusive

 

marketing rights to the sport channel. Since Mega Media has already

 

installed cable to all of th homes in its market area, the marginal cost of

 

delivering th sport channel to subscriber to Zero. The manager of Mega

 

Media needs to know what price to charge for the sports channel service

 

to maximize her profit. Before setting price, she hires an economist to

 

estimate demand for the sport channel. The economist discovers that

 

there are two types of subscribers who value premium sporting channels.

 

First are the 3,000 die-hard spots fan who will pay as much as $150 a

 

year for the new channel. Second, the premium sports channel will

 

appeal to about 20,000 occacional sports viewers who will pay as much

 

as $25 a year for a subscription to it.

 

a. price = $25; profit= $475,000

 

b. price= $25 ; profit=$350,000

 

c. price= $150; profit= $500,000

 

d. price= $150, profit = $400,000

 

 

4. Refer to the Mega Media Cable Scenario: If Mega Media Cable TV is able to price discriminate, what woudl be the maximum amount of profit it could generate?

 

a. $950,000

 

b. $850,000

 

c. $400,000

 

d. 350,000

 


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This question was answered on: May 23, 2022

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