Senior Citizen Market Other Adult Market Quantity of Output Total Cost in Dollar
ID: 1096718 • Letter: S
Question
Senior Citizen Market Other Adult Market
Quantity of Output
Total Cost in Dollars
Quantity Demanded
Price of Soft Drink
Quantity Demanded
Price of Soft Drink
50
110
50
0.75
50
2.00
100
140
100
0.50
100
1.50
150
170
150
0.25
150
1.25
200
200
200
0.10
200
1.05
250
230
250
0.85
If his estimates are correct, at what level of soft-drink output should the manager plan to produce? How much of the output will he sell to seniors and what price will he charge them? How much of the output will he sell to other adults and what price will he charge them? Explain. What will be his profit (loss)?
Quantity of Output
Total Cost in Dollars
Quantity Demanded
Price of Soft Drink
Quantity Demanded
Price of Soft Drink
50
110
50
0.75
50
2.00
100
140
100
0.50
100
1.50
150
170
150
0.25
150
1.25
200
200
200
0.10
200
1.05
250
230
250
0.85
Explanation / Answer
Senior Citizen Market Other Adult Market
Quantity of Output
Total Cost in Dollars
Quantity Demanded
Price of Soft Drink
Quantity Demanded
Price of Soft Drink
50
110
50
0.75
50
2.00
100
140
100
0.50
100
1.50
150
170
150
0.25
150
1.25
200
200
200
0.10
200
1.05
250
230
250
0.85
If his estimates are correct, at what level of soft-drink output should the manager plan to produce? How much of the output will he sell to seniors and what price will he charge them? How much of the output will he sell to other adults and what price will he charge them? Explain. What will be his profit (loss)?
Ans: the total cost estimated for old in each price are: TC = PQ
Hence, 110 = 50 * .75 = 37.5; 140 = 100 * .50 = 50; 170 = 150* .25 = 37.5; 200 = 200* .10 = 20;230 = 0
for other adults: 110 = 50 * 2 = 100; 140 = 100 * 1.50 = 150; 50 = 50 * 2 = 100
Thus for seniors the output should be 200 where quantity demanded is 200, total cost = 200 and price is 0.10.so the price charged for 200 bottles is 20.
For other adults the price of 2.0 where the quantity demanded by adults is 50 which gives the revenue as 100 and thus total cost at that revenue is 50, here TR > TC and is double, thus quantity sold at 50 in the market is the option.
Price charged for other adults will be 2 for each quantity and for 50, price will be 100.
Profit of 50 dollar will be obtained from other adults, while loss of 180 dollar for seniors.
Quantity of Output
Total Cost in Dollars
Quantity Demanded
Price of Soft Drink
Quantity Demanded
Price of Soft Drink
50
110
50
0.75
50
2.00
100
140
100
0.50
100
1.50
150
170
150
0.25
150
1.25
200
200
200
0.10
200
1.05
250
230
250
0.85
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