1.) The demand function for a certain make of replacement cartridges for a water

Question

1.) The demand function for a certain make of replacement cartridges for a water purifier is given by the following equation where p is the unit price in dollars and x is the quantity demanded each week, measured in units of a thousand.

Determine the consumers' surplus if the market price is set at $8/cartridge. (Round your answer to two decimal places.)

2.) The demand function for a certain brand of CD is given by the following equation where p is the wholesale unit price in dollars and x is the quantity demanded each week, measured in units of a thousand.

Determine the consumers' surplus if the wholesale market price is set at $9/disc. (Round your answer to two decimal places.)

3.) It is known that the quantity demanded of a certain make of portable hair dryer is x hundred units/week and the corresponding wholesale unit price (in dollars) is the following.

Determine the consumers' surplus if the wholesale market price is set at $11/unit. (Round your answer to two decimal places.)

4.) Camille purchased a 19-yr franchise for a computer outlet store that is expected to generate income at the following rate measured in dollars/year.

If the prevailing interest rate is 10%/year compounded continuously, find the present value of the franchise. (Round your answer to the nearest whole number.)

Explanation / Answer

the consumer surplus is 35/3 or 11.66

for the second question the graph will be the same with D=17 instead of 10 and B=20 instead of 10

we'll find the area similaly as in the first part hnce the area will be 280/3=93.33

for the third part the plot will be similar with D=13 and B=16

so the consumer surplus will be 16.44

for the fourth part the principal is compounded annually

hence amount at the end of 19 years is its value

400,000(1+r/n)^19*n

sinc it is compounded annually n=1

and r=0.10

therefore the value of the franchisee will be 400,000(1.1)^12= $2,446,363.618

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