{ "cells": [ { "cell_type": "markdown", "metadata": {}, "source": [ "# Monopoly, costs problems\n", "## Prof. Rabanal [Econ 133]\n" ] }, { "cell_type": "markdown", "metadata": {}, "source": [ "### Problem 2: Elizabeth and the new volleyball club\n", "\n", "Elizabeth is thinking to start a new volleyball club in the remote island of Guam. Many parents are happy to enroll their children with the famous volleyball player. \n", "Her friend Katie estimates that the demand for the club is $Q^d = 1000 - 2p$, where $p$ is the fee that students have to pay per hour. Assume that there is no other club alternatives in the island, and the cost per student is 100. \n", "\n", "a. How many hours should Elizabeth open the club? \n", "\n", "b. Katie recommends her that perhaps she can get greater profits if she sets different fees for different hours. In this case, what will be Elizabeth's profit? \n", "\n", "c. Katie obtained the market demand (given above) for the club after aggregrating two type of consumers demands. The richer households demand, who are located in the West coast, is given by $Q^d_W = 600 - p$. \n", " - What's the demand for the east coast households? \n", " - If Elizabeth can set different fees for these two types of households, then what will be the fees and her total profit? \n", " - Provide some suggestions how Elizabeth can implement the differentiated fees according to the household income. \n", " \n", "\n", "\n", "\n" ] }, { "cell_type": "code", "execution_count": 1, "metadata": {}, "outputs": [ { "data": { "text/html": [ "
\n", " | Q | \n", "TR | \n", "TC | \n", "Profits | \n", "MR | \n", "MC | \n", "Delta Profits | \n", "AFC | \n", "AVC | \n", "AC | \n", "
---|---|---|---|---|---|---|---|---|---|---|
0 | \n", "0 | \n", "0 | \n", "30 | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "
1 | \n", "1 | \n", "50 | \n", "34 | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "
2 | \n", "2 | \n", "100 | \n", "40 | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "
3 | \n", "3 | \n", "150 | \n", "51 | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "
4 | \n", "4 | \n", "200 | \n", "68 | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "
5 | \n", "5 | \n", "250 | \n", "91 | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "
6 | \n", "6 | \n", "300 | \n", "120 | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "
7 | \n", "7 | \n", "350 | \n", "156 | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "
8 | \n", "8 | \n", "400 | \n", "206 | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "
9 | \n", "9 | \n", "450 | \n", "296 | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "
10 | \n", "10 | \n", "500 | \n", "420 | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "NaN | \n", "