Question: In some cities, Uber has a monopoly on ride-sharing services. In one of these cities, the demand curve on weekdays is given by P =

In some cities, Uber has a monopoly on ride-sharing services. In one of these cities, the demand curve on weekdays is given by P = 50 - Q. However, during weekend nights, or surge hours, the demand for rides increases dramatically and the new demand curve is P = 100 - Q. Assume that the marginal cost and the total fixed cost are both zero.

1. Determine the profit maximizing price during weekdays and during surge hours.

2. Determine the profit maximizing price during weekdays and during surge hours if MC = 10 instead of

zero.

3. Draw a graph showing the demand, marginal revenue, and marginal cost curves during surge hours from part (2), indicating the profit maximizing price and quantity. Determine Uber's profit and the DWL during surge hours, and show them on a graph.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

The XYZ Manufacturing Company produces two products, S-101 and C-110. You have obtained the following information regarding the annual manufacturing support (i.e., factory overhead) costs associated...

In some cities, Uber has a monopoly on ride-sharing services. In one town, the demand curve on weekdays is given by the following equation: P=601Q. However, during weekend nights, or surge hours, the...

==+19. In some cities, Uber has a monopoly on ride-sharing services. In one town, the demand curve on weekdays is given by the following equation: P = 50 - Q.

6. Monopoly Pricing In some cities, Uber has a monopoly on ride-sharing services. In one town, the demand curve on weekdays is given by the following equation: P = 50- q However, during weekend...

Microeconomic theory l. Monopoly Pricing In some cities, Uber has a monopoly on ride-sharing services. In one town, the demand curve on weekdays is given by the following equation: p=50q However,...

Question: Recommend two ways in which leadership at UBER can effectively nurture and facilitate change. Relevant information from the case should be included. Provide relevant references to key...

Demand and Supply Discussion Question: Applications-Ubereconomics Please read the article below and respond to the follow-up question: Why Uber Is an Economist's Dream Does 'surge pricing'...

Demand and Supply Discussion Question: Applications-Ubereconomics Please read the article below and respond to the follow-up question: Using Big Data to Estimate Consumer Surplus: The Case of Uber...

Explain why this alternative is the recommendation. Use details here! Sell the company on your idea! Use the case below for help. (PARAGRAPHS) This is the alternative soultion**Merger & Acquisition...

Case 16 Please be as elaborate as possible, this is a Strategic Management university paper. The conclusion is the basic question. Identify the problems and give solutions. Give a complete SWOT and...

Paragraph Styles Questions: 1. How would you characterize Uber's business model and strategy? What are the key elements of its customer value proposition? Its profit formula? Its approach to...

When toluene (C6H5CH3) is treated with 2-methyl-2-butene and sulfuric acid, two products are observed. What are the structures of the two products? Provide a mechanism for the formation of each...

What are foreign exchange rates?

what is the difference between the term structure of interest rates and the

Consider a weak acid, HA, with pKa = 5.20. You start with 100.0 ml of a buffer solution in which [A-] = 0.40M and [HA] = 0.60M. You add 100ml of a 0.10M NaOH solution. What is the change in pH caused...

1. Because medical records are private, an individual applying for health insurance will know more about his own health conditions than will the insurance companies to which he is applying for...

1. People drive faster when they have auto insurance. This is an example of: LO4.6 a. Adverse selection. b. Asymmetric information. c. Moral hazard.

3. Place an M beside the items in the following list that describe a moral hazard problem and an A beside those that describe an adverse selection problem. LO4.6 a. A person with a terminal illness...