State profit- maximizing price and quantity

Assignment Help Business Management
Reference no: EM131433765

The Commonwealth of Pennsylvania is the monopoly retailer of wine in that state. Suppose that Quaker Cabernet has no close substitutes and that the statewide inverse demand function for this wine is p = 5 - 0.001Q. The state purchases the wine on the wholesale market for $ 2 per bottle, and the state-operated liquor stores incur no other expenses to sell this wine.

a) What are the state's profit- maximizing price and quantity?

b) Neighboring New Jersey permits private retailers to sell wine. They face the same statewide demand curve as in Pennsylvania. No interstate wine trade is permitted. Suppose the New Jersey market for Quaker Cabernet is perfectly competitive. What are the equilibrium price and quantity?

c) New Jersey taxes wine sales. While the retailers pay the taxes on wine sales, they may pass on some or all of these taxes to consumers by raising prices. Identify the specific tax ( tax per bottle sold) for which New Jersey's equilibrium market price and quantity equal the Pennsylvania monopoly price and quantity. Given the quantity tax, show that New Jersey's tax revenue equals Pennsylvania's profit.

Reference no: EM131433765

Questions Cloud

The organization purposes in existence and achievement : The mission statement for an organization should aim to be just 1 sentence long. That one sentence needs to speak to the organization's purposes in existence and achievement, which is a lot of thought to contain in a few words. Think of the organizat..
What milestones should be planned in the design phase : Who is the intended audience? What milestones should be planned in the design phase? What branding should be used for the website?
How should management deal with the physical structures : How should management deal with the physical structures at the time of the consolidation? What specific steps should the board take to create an executive team to manage the newly created organization? Given the diversity of cultures embedded in the ..
Focus on the use of measurement tools : This week's Seminar will focus on the use of measurement tools to assess client behavior. Create your Seminar responses in MS Word. Your response to the questions above should be composed in complete sentences and paragraphs and be 300-350 words i..
State profit- maximizing price and quantity : The state purchases the wine on the wholesale market for $ 2 per bottle, and the state-operated liquor stores incur no other expenses to sell this wine. a) What are the state's profit- maximizing price and quantity?
Will the necessary information reach the target audience : IT 520 : You will submit a written report in which you analyze the communication environment that exists within BOLDFlash and discuss the particular areas of concern.Specifically the following critical elements must be addressed: Background and Ar..
Harassment that results in tangible employment action : The primary difference between harassment that results in tangible employment action and harassment that creates a hostile working environment is
Forces model to analyze the competitive environment : Use Porter's five forces model to analyze the competitive environment of a country of your choice. (pick a product catagory you are familiar with). How does a market orientation explain entry into that market? A resource based view? Why both perspect..
Explain why the entity relationship model is useful : Explain why the entity relationship (ER) model is useful. How has it helped to produce a more structured relational database design environment?

Reviews

Write a Review

Business Management Questions & Answers

  How does walmarts debt differ from debt investment held

How does Walmart's debt differ from debt investment held by the firm? What types of equity securities has the firm issued and in what ways can the equity securities be analyzed?

  Project goals in the context of change management

Define the project goals in the context of change management. Propose an action plan for creating change. Establish how progress will be measured. Determine how performance will be validated.

  How can supply chain management

How can Supply Chain Management (SCM) improve the Five Forces pressing in on the enterprise's room to produce excellent financial results and how can SCM have each effect that you describe, on the Five Forces?  Also please describe how the enterprise..

  What are the risks of such actions

What actions, if any, should you take? What are the risks of such actions? What does everyone think?

  Main methods of process improvement

What are the main methods of process improvement and demonstrate your understanding of The Model of Improvement with an example from your experience?

  Assembly language program that accumulates and reports

Write an assembly language program that accumulates and reports the sales for the Albatross Corporation. The Albatross Company has four salespeople who sell five different products. The four salesperson are each identified by a number from 1 to ..

  Calculating bidslambda computer products competed for and

calculating bidslambda computer products competed for and won a contract to produce two prototype units of a new type

  Efficiency challenges at the cafe and harm the business

From the scenarios, Chris and Erica are faced with efficiency challenges at the café. Explain how these challenges could potentially harm the business, and suggest a brief plan to improve on efficiency and customer satisfaction.

  Describe the major changes and events that gave rise

Describe the major changes and events that gave rise to the present focus on business ethics. Provide examples of how these changes impact current business philosophies and reporting practices. In your conclusion, discuss how your values and principl..

  Independent variable or dependent variableunderstanding

independent variable or dependent variable?understanding business research terms and concepts part 1in the following

  Investor expect to earn

Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. Under these conditions, what r..

  What are the total annual costs of holding

What are the total annual costs of holding and ordering (managing) this inventory? - How many orders should Discount-Mart place with Specialty Lighting per year?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd