The following equation represents the weekly demand that a, Ask an Expert

Economics

The following equation represents the weekly demand that a local theater faces.

Qd = 2000 - 25 P + 2 A,

where P represents price and A is the number of weekly advertisements.

Presently the theater advertises 125 times per week. Assuming this is the only theater in town, and its marginal cost, MC, is equal to zero,

a. Determine the profit maximizing ticket price for the theater.

b. What is the price elasticity of its demand at this price?

c. What is the elasticity of its demand with respect to advertising?

d. Now suppose the theater increases the number of its ads to 250. Should the theater increase its price following this ad campaign? Explain.

View complete question

Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M91236245

Have any Question?Write your Review or question?

Related Questions in Microeconomics

Question in europe the uk is the only country where there

Question: In Europe, the UK is the only country where there has been a consistent tradeoff between inflation and unemployment. What factors caused this tradeoff to occur in Britain but not in Continental Europe? The resp ...

Question 1 how has latin americas position in the global

Question: 1. How has latin America's position in the global economy affected its ability to develop and to satisfy the demands of its population? 2. What impact do high levels of social inequality have on the politics of ...

Question propose two separate behaviors other than

Question: Propose two separate behaviors other than government purchases that could offset the effects of the military spending reduction on total planned expenditure. Be specific in your examples. The response must be t ...

Question this question is about the baumol-tobin model for

Question: This question is about the Baumol-Tobin model. For this question, state your answers in terms of income (Y), money holdings (M), interest (i), Number of trips to the bank (N), and cost of trips to the bank (F) ...

Question if you owned a small firm that had become somewhat

Question: If you owned a small firm that had become somewhat established, but you needed a surge of financial capital to carry out a major expansion, would you prefer to raise the funds through borrowing or by issuing st ...

Question - what is the role of timing in deciding to enter

Question - What is the role of timing in deciding to enter or exit a market? Firms decide to enter a market based on current and historical information, but time lags can change the economic environment. What are the ris ...

Quesiton in chapter two of our required text what

Quesiton: In chapter two of our required text What Environmentalist Need to Know About Economics the author states that environmentalist should prioritize its goals. The idea is to figure out which goals would yield a hi ...

Question what is an exchange rate system what is the

Question: What is an exchange rate system? What is the difference between a fixed exchange rate system and a managed float exchange rate system? The response must be typed, single spaced, must be in times new roman font ...

Question briefly explain the difference between generic and

Question: Briefly explain the difference between generic and brand-name drugs. Why do some drugs not have a generic equivalent? The response must be typed, single spaced, must be in times new roman font (size 12) and mus ...

Question what price will the firm charge what will be its

Question: What price will the firm charge, what will be its optimal output level, and what is the firms total economic profit/loss? Please provide your own answers to those three questions. The response must be typed, si ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Microeconomics Expert