1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Nat2105 [25]
3 years ago
7

You are the manager of a gas station in a small town, and your goal is to maximize profits. Based on your experience, the elasti

city of demand of Texans for a car wash is -2, while that of non-Texans is -1.5. Your marginal cost is $6.
a. Are the conditions necessary for price discrimination to be an effective means of enhancing profits being met? Explain.
b. What is the profit-maximizing price to charge a Texan for a car wash?
c. What is the profit-maximizing price to charge a Californian for a car wash?
Business
1 answer:
Levart [38]3 years ago
7 0

<span>a. </span>No. Since the good that I am selling is inelastic considering the elasticity given in and outside Texas, having a lower price than non-Texan gas stations would have less impact on the quantity demanded.

<span>b. </span>The profit-maximizing price to charge a Texan for a car wash would be $12.

<span>c. </span><span>The profit-maximizing price to charge a Californian for a car wash would be $18. </span>

<span>(See attached for the calculations.)</span>

Download docx
You might be interested in
If a 10 percent increase in both capital and labor causes output to increase by less than 10 percent, the production function is
olasank [31]

Answer:

Because of economies and diseconomies of scale.

Explanation:

Increasing returns to scale refers to the situation when a proportionate change in input leads to more than proportionate change in output. This may happen because of economies of scale.  

Economies of scale are said to happen when the average cost of production decreases with the increase in the volume of output.  

Decreasing returns to scale refers to the situation when a proportionate change in input leads to less than proportionate change in output. This may happen because of diseconomies of scale.  

Diseconomies of scale occur when a firm experiences an increase in the average total cost as the volume of output increases.

3 0
3 years ago
Within organizations, leaders are needed to ________ and managers are needed to ________.
velikii [3]
Pay , work hope this helped you have a good day
4 0
3 years ago
Gwen is a doctor who is forming her own medical practice. She wants her practice to be flexible, simple to run, and free from re
algol [13]

Answer:

A limited liability company

Explanation:

A limited liability company has characteristics of corporations, partnerships, and sole proprietorships. Like a corporation, the owners have limited liability. Like a partnership and sole proprietorship, profits are taxed once through flow through taxation.

I hope my answer helps you

4 0
3 years ago
Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + aMM. From the law of demand we know that ax will be: less tha
diamong [38]

Answer:

less than zero

Explanation:

According to the law of demand, an increase in price reflects in a decrease in demad. That is, price and demand are inversely proportional. Since ax is associated with the price of good X, it must be negative to accurately describe that behavior in the demand function.

Thus, ax will be: less than zero.

6 0
3 years ago
Keith Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by chan
aleksley [76]

There will be decrease in profit if dropping of sour cream. So that means Keith Inc would lose $4,000.00

3 0
3 years ago
Read 2 more answers
Other questions:
  • Choose a well-known company that you are familiar with, and explain how that company could use each of the five P's of the marke
    10·2 answers
  • John h. harland company is a large company with 5,200 employees and almost $800 million in annual sales. the company is best kno
    9·1 answer
  • You are taking a crash course in e-business in order to compete for a plum job opening in the field. However, you missed the cla
    7·2 answers
  • Consider the overall market for beverages in the US. This market consists of both alcoholic and non-alcoholic drinks. Within the
    9·1 answer
  • Samuelson has a beginning inventory balance on January 1 of 12,000 units and desires an ending balance of 20% of the next month’
    13·2 answers
  • After hearing that a local tire company was looking for a new firm to handle their advertising, Kevin scheduled a sales presenta
    12·1 answer
  • Cloud Storage Solutions works closely with customers showing them early versions of its software and interface and then quickly
    10·1 answer
  • Net initial investment includes ________. Group of answer choices cash outflow to purchase new equipment, depreciation on new eq
    5·1 answer
  • Companies typically prepare ______ financial statements each accounting period.
    13·1 answer
  • David, a real estate broker representing the seller, received an offer on his client's property for $450,000, $50,000 below the
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!