Economics Answers

Qx = 235 - 3Px + 40A - 20U + 8Pw
The number of detailing jobs he gets per month (Qx) depends on the price he charges per job (Px), his monthly advertising expenditures (A) measured in Rs. 1,000s, the regional percentage unemployment rate (U), and the average price charged by local car wash businesses (Pw) for a standard wash and wax.
c) Rahim is currently charging Rs 65 per detailing job and spending Rs 3,500 per month on advertising. The regional unemployment rate is 7.5% and the average price of a wash and wax at a local car wash is Rs 15. How many detailing jobs per month can Rahim expect under these conditions?
(e) Calculate the Advertising and price elasticity of demand under conditions described in part c. Is the demand elastic or inelastic? Also calculate the total and marginal revenue.

Qx = 235 - 3Px + 40A - 20U + 8Pw
The number of detailing jobs he gets per month (Qx) depends on the price he charges per job (Px), his monthly advertising expenditures (A) measured in Rs. 1,000s, the regional percentage unemployment rate (U), and the average price charged by local car wash businesses (Pw) for a standard wash and wax.

(d) Derive the demand curve for detailing jobs under current conditions. Calculate the values needed to fill in the demand schedule below and then plot the schedule on the graph provided.

Px: 105 95 85 75 65 55 45 35 25 15

Qx:

Qx = 235 - 3Px + 40A - 20U + 8Pw

The number of detailing jobs he gets per month (Qx) depends on the price he charges per job (Px), his monthly advertising expenditures (A) measured in Rs. 1,000s, the regional percentage unemployment rate (U), and the average price charged by local car wash businesses (Pw) for a standard wash and wax.


(a)Is automobile detailing a normal good or an inferior good? How can you tell?

(b) Is a wash and wax at the local car wash a complement or a substitute for automobile detailing? How can you tell?

Suppose a monopolist is able to segment its market into 2 consumer groups based upon known differences in willingness to pay. Group A's demand function is given by P = 90 - 2Q and group B's demand function is given by P = 70 - 0.5Q. In addition, the marginal cost of producing and selling a unit to group A is the same as the marginal cost of producing and selling a unit to group B. Specifically, MC = 10. If the firm practices second degree (or multi-market) price discrimination, then total profit will be maximized by:
i. selling Q = 20 units at a price of P = $50 to members of group A
ii. selling Q = 40 units at a price of P = $10 to members of group A
iii. selling Q = 60 units at a price of P = $40 to members of group B
iv. selling Q = 80 units at a price of P = $30 to members of group B

Suppose a monopolist is able to segment its market into 2 consumer groups based upon known differences in willingness to pay. Group A's demand function is given by P = 160 - 2Q and group B's demand function is given by P = 120 - Q. In addition, the marginal cost of producing and selling a unit to group A is the same as the marginal cost of producing and selling a unit to group B. Specifically, MC = 20. If the firm practices second degree (or multi-market) price discrimination, then total profit will be maximized by:

The population of country y in 1970 was 60 million. From 1971 to 1975, the total number of births was 25 million and death stood at 3 million. 8 million immigrants and 4 million emigrants were in the reporting period. what is the percentage increase in the population of the country from 1970 to 1975?

2. In 2006, the fees at community colleges will fall from $26 to $24 per unit. Is the demand for community college courses relatively elastic or relatively inelastic? Use the three factors to explain why. Based on your answer, what will happen to the revenues of community colleges?

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