Pancakes creation, Microeconomics

PanCakes Creations is considering franchising its single brand of pancakes to stall-holders on the Zandvoort beach, which is 5 kilometers long. PanCakes Creations estimates that on an average day there are 1000 sunbathers evenly spread along the beach and that every sunbather will buy one pancake per day given that they cost no more than €5. The effort of getting up from the sand to get a pancake and return to the sunbed is estimated at 25 cents for each ¼ kilometer the sunbather is from a stall. Every pancake costs 50 cents to make and it costs €40 per day to operate a stall no matter how many pancakes it makes. 

a. Assume that PanCakes Creations award a franchise to only one stall-holder. This beach holder locates its stall in the center of the beach. Write down the stall's demand function for pancakes as a function of price.

 

b. Assume that the franchise contract needs the stall-holder to cater to all consumers on the beach. What price will the stall-holder charge and what will be its profits?

 

Posted Date: 3/28/2013 1:12:25 AM | Location : United States







Related Discussions:- Pancakes creation, Assignment Help, Ask Question on Pancakes creation, Get Answer, Expert's Help, Pancakes creation Discussions

Write discussion on Pancakes creation
Your posts are moderated
Related Questions
True public goods are those goods which can't be provided to one group of consumers, without being provided to any other consumers who desire them. Thus they are "non-excludable."



Maurice has the following utility function: U (X; Y ) = 20X + 80Y ?? X2 ?? 2Y 2 where X is his consumption of CDs, with a price of $1, and Y is his consumption of movie videos, wit

Production: - Firms should choose how much of each to produce. - The alternative quantities can be illustrated by using product transformation curves. Product Transforma

1. Suppose the wage rate is w = 1. An agent is working 6 hours per day and consumes 5 units of goods per day. Suppose that the agent claims to be indifferent between his current

An individual derives utility from consuming goods X and Y according to the following estimated utility function U = 12X 2/3 Y ¼       X and Y are quantities (units) of


BUREAUCRACY: M de Gournay, an economist of France, first coined the word Bureaucracy in the eighteenth century to refer to "a fourth or fifth form of Government" in which "off

Uses of price and income elasticity of demand: The concept of price elasticity of demand has some uses whihc include the following: (i) Pricing of goods and services It is