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Economics
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12 Feb 2018

There are two consumers A and B. Consumer A is willing to pay 3-2F dollars for a unit of flowers for the public square and B is willing to pay 5-5F dollars for a unit of flowers. If the cost of flowers is constant at $1 per unit then how many flowers should be placed in the square?

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Jarrod Robel
Jarrod RobelLv2
13 Feb 2018
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Related questions

There are two types of consumers or vacationers of a monopoly hotel in a resort town: type 1, of which there are 300 consumers willing to pay V1 = $600 per day; and type 2, of which there are 500 consumers, willing to pay V2 = $200 per day. The daily unit cost of serving a consumer is $50 per day, plus there is a fixed cost of $5,000 per day.

a. What price will the hotel set and how many consumers will be served? What is the hotel's daily profit and what is consumer surplus?

b. Suppose a marketing campaign targeted to type 2 consumers can raise their willingness to pay to $350 per night. What is the maximum amount that the hotel would pay per day to run the campaign? If the campaign costs less than this amount and the firm engages in it what is the effect on consumer surplus?

c. Now suppose that there are 850 consumers willing to pay V2 = $200 per day. Everything else is the same. How do your answers to a) and b) change in this case?

There are three consumers of a public good. The marginal willingness-to-pay for the consumers are as follows:

consumer 1 :MWP1(Q)=60-Q

Consumer 2: MWP2(Q)=100-Q

consumer 3: MWP(Q)=140-Q

Where MWPi (i=1,2,3) is in dollars per unit and Q is the quantity of the public good. The marginal cost of the public good is $180. a) What is the efficient level of production of the public good? b) If the three consumers were to pay a third of the cost of producing the public good, what quantity of the public good would be produced? What would be the size of the deadweight loss? c) Propose an alternative cost sharing arrangement that leads to the efficient quantity of the public good being produced.

1. A point on the graph of a demand curve has co-ordinates P, and Q. Which of the following three interpretations of this point on the demand curve) are correct?: 1. The maximum price that any consumer is willing to pay for this good is P, and the minimum amount this consumer is willing to purchase at that price is Q, of the good. m. At the price P, the maximum amount of the good that consumers are willing to purchase is Q. of the good. VIX. Although some consumers are willing to pay more than P, for this good, the maximum price consumers are willing to pay for the last unit of the good i.e., the Qith unit of the good) is P. (A) Only statement I is correct (B) Only statement II is correct (C) Only statement Ill is correct (D) Statements I and II are both correct (E) Statements I and III are both correct (F) Statements II and III are both correct (G) Statements I and II and Ill are all correct (H) None of the statements are correct

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