For use with Robert I. Mochrie, Intermediate Microeconomics, Palgrave, 2016
b)Adapt your diagram so that the vertical axis now measures the (variable) price that the campus bookstore charges. Show how the number of books sold varies with the price that the bookstore sets.
X2.17A new producer of smartphones has to decide the price that it should set for handsets. After conducting some market research, it concludes that the demand for its product can be written as q= 100– 0.5p, where q is the quantity of handsets and pis the price that the firm can charge.a)Explain why the firm would be unable to give away more than 100 handsets free of charge.
b)Explain why there cannot be any consumer with a WTP greater than 200.
c)Sketch the demand curve for the firm.
Go back to the discussion of the café, recalling the assumption that any consumer can buy any number of cups of coffee for a fixed price:a)Does this maximize the sales revenue that the café might obtain from the consumer? 02040608010012012345Value Books WTP and demand for books