ajaz_eco_204_2012_2013_chapter_17__18_PP

Currently in 2010 the toronto factory currently

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Unformatted text preview: CDistribution = $0 Materials Inputs T. O. Jackets Manufactured D & H manufactures jackets according to the production function: Here is number of jackets manufactured, is fixed labor, is materials, and is fixed capital. Currently, in 2010, the Toronto factory currently employs 32 tailors ( ) who work on 8 machines ( ) D & H hires tailors and purchases materials from competitive markets. D & H purchased the machines in January 2010 for $100 each and the machines have a lifetime of 20 months. In each month: D & H has signed a 1 year contract with Harry Boor-son: in each month of 2010 D & H will sell Harry Boor-son 20 jackets a month at a fixed price of $100. This contract expires in December 2010. Label the NYC market “market 1”, the Boston market “market 2” and the Toronto market “market 3”. The following exhibit contains some key figures for January – March 2010: Units Sold in NYC: Units Sold in Boston: Units Sold in Toronto: NYC Revenues: Boston Revenues: Toronto Revenues: Dolce & Havana: January – March 2010 January February 10 30 20 10 20 20 $9,000 $21,000 $5,000 $3,500 $2,000 $2,000 March 20 10 20 $16,000 $3,500 $2,000 4 ECO 204 Chapter 17 & 18: Practice Problems & Solutions for Firms with Market Power: Business Apps and Price Discrimination in ECO 204 (this version 2012-2013) University of Toronto, Department of Economics (STG). ECO 204, S. Ajaz Hussain. Do not distribute. Available (Unused) Capacity Number of individual customers in NYC Number of customers individual customers in Boston 50 40 50 10 10 10 5 5 5 (a) Show that the NYC market demand curve is 2010. Show all calculations and state any assumptions. (b) Show that the Boston market demand curve is 2010. Show all calculations and state any assumptions. and from this calculate the price elasticity in March and from this calculate the price elasticity in March (c) Show that the monthly cost function for manufacturing the target output is: () [You will need this cost...
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