+1-415-670-9189
info@expertsmind.com
Market imperfection associated with negative externalities
Course:- Macroeconomics
Reference No.:- EM1364




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
Use the data on U.S. real GDP below to compute real GDP per person for each year. Then use these numbers to compute the percentage increase in real GDP per person from 1987
Is China still using central bank foreign exchange policy to maintain the value of the yuan? What is the current policy of the United States on this issue - If the U.S. econ
Describe how each of these activities economically affects government, households, and businesses - describe the flow of resources from one entity to another for each activity
The Occupational Safety and Health Administration (OSHA) promulgates safety and health standards. These standards typically apply to machinery (capital), which is required t
Develop a paper detailing an analysis of market structures and relating pricing strategies that are suitable for each of these structures. Furthermore, include a real world
Enumerate the common areas where frauds and disputes normally take place in internationally marine transaction and commercial shipping , and state the common precautions to
Draw the budget constraint showing the trade-off between dining hall meals and Cups O’ Soup. Assuming that he spends equal amounts on both goods, draw an indifference curve sh
Concerned about the crowding-out effects of government borrowing on private investment spending, a candidate for president argues that the US should just print money to cove