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    Price (P)
    Quantity (Q)
    $80
    20000
    70
    25000
    60
    30000
    50
    35000
    Suppose further that all three firms are selling their product for $60 and each has about one-third of the total market.
    What is the amount of total revenue each firm receives in dollars?
    Each firm has less revenue.
    Each firm has more revenue.
    The price-dropper has more revenue and the others have less.
    The price-dropper has less revenue and the others have more.
    Raising to $70
    Lowering to $50
    Making no change (keeping price at $60)
    P = $45 $0.2Q
    MR = $45 $0.4Q
    TC = $500 + $5Q
    MC = $5
    What quantity would maximize profits for this firm? (Hint: Recall that profit maximizing is where MR = MC)
    New firms would enter.
    Some existing firms would leave.
    Some existing firms would stay but no new firms would enter.
    There is not enough information to make this determination.
    Price ($)
    Quantity Adults
    Quantity Children
    5
    15
    20
    6
    14
    18
    7
    13
    16
    8
    12
    14
    9
    11
    12
    10
    10
    10
    11
    9
    8
    12
    8
    6
    13
    7
    4
    14
    6
    2
    The marginal operating cost of each unit of quantity is $5. (Hint: Because marginal cost is a constant so is average variable cost. Ignore fixed cost.) The owners of the amusement park want to maximize profits.
    Calculate the price quantity and profit for each segment if the amusement park charges a different price in each market. (Hint: calculate profit at each price in the adult market then in the child market and choose profit maximizing in each. Using a spreadsheet would make this task manageable.)
    Adult market price (in dollars): [a]
    Adult market quantity: [b]
    Adult market profit (in dollars): [c]
    Child market price (in dollars): [d]
    Child market quantity: [e]
    Child market profit (in dollars): [f]
    Total profit (adult + child in dollars): [g]
    Market price (in dollars): [a]
    Quantity (child + adult at this price): [b]
    Profit: [c]
    Higher profit with split pricing
    Lower profit with split pricing
    Same profit with split pricing
    Cannot determine with the information available
    Which firm is the most profitable in this market?
    Gray (Profit is highest in every situation.)
    White
    Neither they are equally profitable
    Neither there is no profit made by either firm
    Open Sundays
    Closed Sundays
    There is no dominant strategy
    Open Sundays
    Closed Sundays
    There is no dominant strategy
    Both open Sundays
    Both closed Sundays
    **White open Sundays Gray closed Sundays
    White closed Sundays Gray closed Sundays
    Yes the position identified in the previous question is the best outcome for both.
    No it would be mutually advantageous to cooperate and choose a different outcome.
    Gray could do better but White is already in the best position and would therefore need an incentive to cooperate.
    White could do better but Gray is already in the best position and would therefore need an incentive to cooperate.

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