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problemset5(#1)

# problemset5(#1) - 1 a Price 15.00 14.00 13.00 12.00 11.00...

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1) a. Table A Students Non-students Total Market Price Quantity Demanded Quantity Demanded Quantity Demanded Total Revenue Marginal Revenue Profits 15.00 1000 600 1600 24000 -- 12400 14.00 1100 900 2000 28000 9 16000 13.00 1200 1200 2400 31200 7 18800 12.00 1300 1500 2800 33600 5 20800 11.00 1400 1800 3200 35200 3 22000 10.00 1500 2100 3600 36000 1 22400 9.00 1600 2400 4000 36000 -1 22000 8.00 1700 2700 4400 35200 -3 20800 7.00 1800 3000 4800 33600 -5 18800 6.00 1900 3300 5200 31200 -7 16000 Optimal quantity is where MR = MC = \$1, which is 3600 pancakes. Optimal price is \$10.00. Patrick’s profit is \$22,400. b. Without including Fixed Costs of \$10,000: Table B (Students) Price Quantity Total Revenue Marginal Revenue Profits 15.00 1000 15000 -- 14000 14.00 1100 15400 3 14300 13.00 1200 15600 1 14400 12.00 1300 15600 -1 14300 11.00 1400 15400 -3 14000 10.00 1500 15000 -5 13500 9.00 1600 14400 -7 12800 8.00 1700 13600 -9 11900 7.00 1800 12600 -11 10800 6.00 1900 11400 -13 9500 Table B (Non-students) Price

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