5. (6 points) Suppose when we look at the monthly sales of hamburgers & fries in the Devil's Den, we see that when CCSU increased the price from $7 to $13, the quantity demanded fell from 8,000 meals to 4,000 meals.

Bundling of Office Suites: An Economic Analysis (1) What are the optimal prices for Microsoft to charge for Word and Excel if it only sells the two products separately?

(3) What are the optimal prices for Microsoft to charge for Word and Excel if it only sells the two products separately?

(2) What is the optimal price for Microsoft to charge for Word and Excel if it only sells the two products as a bundle?

Consider a market where the price elasticity of the demand for streaming services is -0.6, the price elasticity of demand for movie tickets sold during the evenings is -0.8, and for matinee shows is -1.75. Suppose also that the cross elasticity of demand for movie tickets sold during the evenings with respect to the price of streaming services is 0.2, the cross elasticity of demand for matinee movie tickets with respect to the price of streaming services is 0.1, and the cross elasticity of demand for matinee shows with respect of the price of evenings shows is 1. Moreover, the income elasticity of demand for movie tickets sold during the evenings is 0.7, and the income elasticity of demand for matinee movie tickets is -0.3. Use this information to answer the following questions. 1. Suppose that the price of streaming services rises by 7%; what is the percentage change in the number of streaming service subscriptions? How would you characterize the demand for streaming services? Draw a theoretical diagram demonstrating this change. 2. Suppose that the price of streaming services rises by 7%; what is the percentage change in the quantity demanded of movie tickets for evening shows? Pay close attention to whether the answer is negative or positive; the sign is important. How would you characterize the relationship between both services? Draw a theoretical diagram demonstrating this change. 3. Suppose that the price of streaming services rises by 7%; what is the percentage change in the quantity demanded of movie tickets for matinee shows? Pay close attention to whether the answer is negative or positive; the sign is important. How would you characterize the relationship between both services? Draw a theoretical diagram demonstrating this change. 4. Suppose the price of streaming services rises by 7%; by how much would the price of movie tickets for matinee shows have to change for the quantity demanded to remain unchanged? Indicate whether the price should increase or decrease. Draw a theoretical diagram demonstrating this change. 5. Suppose that income increases by 12%; what is the percentage change in the quantity demanded of movie tickets sold during the evening? Pay close attention to whether the answer is negative or positive; the sign is important. How would you characterize the evening shows? Draw a theoretical diagram demonstrating this change. 6. Suppose that income increases by 12%; what is the percentage change in the quantity demanded of movie tickets for matinee shows? Pay close attention to whether the answer is negative or positive; the sign is important. How would you characterize the matinee shows? Draw a theoretical diagram demonstrating this change. 7. AMC Theaters is considering a 10% increase in movie ticket prices for all showtimes. If you were consulted about this proposal, what would your advice be? Explain your recommendation to AMC Theaters and the economic rationale behind it. Your report to AMC Theaters must include the percent change in total revenue resulting from implementing the 10% movie ticket price increase for both showtime groups. 8. What change would you expect in the number of moviegoers to the matinee shows if AMC Theaters increased the movie ticket price for the evening showtimes by 10%? Draw a theoretical diagram demonstrating this change.

3. Homoud owns a coffee shop that earns him a monthly revenue of 7,500 KD. He spends 240 hours every month on his business trying his best to improve it. Every month, Homoud pays 2,083 KD for coffee beans, milk, cups and other needed supplies and equipment for his coffee shop, 167 KD for water and electricity, and 750 KD in salaries for his workers. He also pays 2,000 KD a month to rent the place that his coffee shop occupies. As a civil engineer with a previous 5 years of experience, Homoud has two job offers at a construction company at a salary of 1,200 KD and another offer at a public sector institution at 1,170 KD. Each of these jobs will require 160 hours of work every month. He can only work one job, though. In general, assume that each hour of Homoud's time is worth 6 KD. Calculate Homoud's: a. Explicit costs b. Implicit costs C. Opportunity costs d. Accounting profit e. Economic profit

The number of cell-phone accessory kits (neon lights, matching covers, and earpods) per day that USA cellular Makeover Inc. can

Question 1 Consider Figure 1 which shows the cost curves of a price taking firm. The market price is given by P. a) Write down the profit-maximizing on Figure 1, the profit-maximizing condition for a firm. Redraw Figure 1. Clearly label quantity for this firm and label it as q1. b) State whether this firm is making a profit or loss when it produces q1. Clearly label on Figure 1, the profit or loss made by the firm when it produces q1. c) Consider an industry made up of many firms that are identical to the firm shown in Figure 1, each of which is producing q1 in the short run. Assume that the standard assumptions of the perfectly competitive industry model hold. Explain in detail what happens in this model in the long run. Specifically mention how, going from the short run to the long run equilibrium, the following change: the output of each firm, the industry output, the market price, the profit of each firm, the number of firms in the industry and the industry supply curve. Explain why each of these variables change. Please include the relevant diagrams for the firm and the industry showing the long run equilibrium.

Because of sales by a competing company, your company's sales of virtual reality video handsets have dropped,

Consider a firm with the production function Q=3K+2L. For this production function, MPk = 3 and MPl = 2. a.) Suppose the firm wants to produce Q=30. If the firm only uses capital, how many units does the firm use? If the firm only uses labor, how many units does the firm use? b.) In a graph with labor on the horizontal axis, what is the slope of the isoquant? (You might want to find the MRTS.) c.) Now that you have the slope and end points, graph the isoquant below. d.) Suppose that R= 1 and W = 1. Therefore equation for the isocost line is C = L +K. What is the slope of the isocost line? e.) Suppose the firm uses only labor. Graph the isocost line. What is C? f.) Suppose the firm uses only captial. Graph the isocost line. What is C? g.) If the firm wants to minimize costs, how many units of K and L does the firm use?