Question: Please answer A-E and can you please show the work 1. A monopolistic pro sports franchise called the Reno Wranglers faces ticket demand that varies

Please answer A-E and can you please show the work

Please answer A-E and can you please show the work 1. A

1. A monopolistic pro sports franchise called the Reno Wranglers faces ticket demand that varies according to the equation Q = 16000 - 100P and earns marginal revenue according to the function MR = 160 - 0.02Q, where Q is the number of tickets (arena seats) sold per unit of time and P is the price per ticket in dollars. The Wranglers incur marginal costs according to the function MC = 85 + 0.01Q. a. If the Reno Wranglers are profit maximizers, how many tickets will the franchise sell per unit of time? What price per ticket will the Wranglers charge? b. The Reno Wranglers incur total costs according to the function TC = 183,750 + 85Q + 0.005Q2. If the Wranglers operate at the profit-maximization point, how much economic profit (or loss) will the franchise earn per unit of time? C. Calculate the vertical intercept of the demand function and the marginal revenue function, and demonstrate that they are equal. d. In light of the results from parts a and c, calculate the level of consumer surplus associated with the Wranglers. [Hint: Think about the area of a key triangle.] e. If Reno government officials awarded the Wranglers a subsidy of $20,000 per unit of time, would the Wranglers earn positive economic profit, break even, or earn economic losses? Explain. After this subsidy, would fans still want the Wranglers to stay in town, or would they want them to move? Explain

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!