+1-415-670-9189
info@expertsmind.com
Market imperfection associated with negative externalities
Course:- Macroeconomics
Reference No.:- EM1361




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Macroeconomics

Question:The airport branch of a car rental company maintains a fleet of 50 SUVs. The interarrival time between requests for an SUV is 2.4 hours, on average, with a standard deviation of 2.4 hours. There is no indication of a systematic arrival pattern over the course of a day. Assume that, if all SUVs are rented, customers are willing to wait until there is an SUV available. An SUV is rented, on average, for 3 days, with a standard deviation of 1 day.

a. What is the average number of SUVs parked in the company's lot?

 b. Through a marketing survey, the company has discovered that if it reduces its daily rental price of $80 by $25, the average demand would increase to 12 rental requests per day and the average rental duration will become 4 days. Assuming that the std. dev. values stay unchanged, should this company adopt this new pricing policy? Provide an analysis!

c. What is the average time a customer has to wait to rent an SUV? Please use the initial parameters rather than the information in (b).

d. How would the waiting time change if the company decides to limit all SUV rentals to exactly 4 days? Assume that if such a restriction is imposed, the average interarrival time will increase to 3 hours, with the standard deviation changing to 3 hours.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Macroeconomics) Materials
Identify a strategic consulting group or company that advertises its services on the Internet. To prepare for your initial post, study the organization's products and servic
What will be his optimal consumption choices of beer and cheese given the original prices of Pb=$2 and Pc=$5 and income =$500? How much income is spent on beer? How much on
Do you think the argument against redistributing income through income taxes based on reducing economic efficiency is a strong one. Provide an example where a business did no
Economics 164 Assignment. Derive an expression for the capital-output ratio, Kt/Yt, as a function of kˆt. If the parameters of the model stay constant, what can you say about
Is economic development a "fundamental human right?" If so, should this "right" be enforceable under international law? The United States, as might be expected, objected to th
A consumer has preferences over goods x and y. The utility function is U=sqrtx + sqrty. The marginal utilities are MUx=1/(2sqrtx) and MUy=1/(sqrty). Calculate MRS and determ
Before 1970, many countries were on the gold standard. Since that time, floating exchange regimes have dominated the global economy. Select a country which now has a floatin
A certain retail store sells six items: A, B, C, D, E, and F. The share of profits attributed to each item is 20%, 16%, 25%, 15%, 10%, and 14% respectively. Which of the fol