Pancakes creation, Microeconomics

Assignment Help:

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?

 


Related Discussions:- Pancakes creation

Demand and Supply , Demand and supply curve for french breads

Demand and supply curve for french breads

Regression on return from schooling and ability, how to estimate a regressi...

how to estimate a regression model that tests for higher ability individuals get a greater return from schooling

Trade, Reasons for International Trade?

Reasons for International Trade?

Marginal Cost, The question states that a hotel charges $60 a night for a r...

The question states that a hotel charges $60 a night for a room per night during off peak. This hotel has a fixed cost of $75 per night and variable costs of $40 per night (only ap

Income and substitution effects, Income and Substitution Effects A fall...

Income and Substitution Effects A fall in price of a good has the two effects: Substitution & Income -Substitution Effect Consumers will tend to buy more of the good

Taxes, Hotel rooms go for $100/room and sell 1000/day; if taxed at $10/room...

Hotel rooms go for $100/room and sell 1000/day; if taxed at $10/room and rate goes to $108 and 900 rooms are sold, what''s the tax revenue and dead weight loss?

Price elasticity of demand, Suppose the price elasticity of demand for extr...

Suppose the price elasticity of demand for extra dark chocolate truffles is -6. Hold other things constant , if price for Extra Dark Chocolate truffles is decrease by 3%, what wil

Perfect competition, When should a firm shut down production in the short r...

When should a firm shut down production in the short run?

Short run versus long run, The Short Run versus long Run - Short-run: ...

The Short Run versus long Run - Short-run: Period of time in which the quantities of one or more production factors cannot be changed. These inputs are called as fi

Write Your Message!

Captcha
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