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Need Help with a draft for my Microeconmics all instruction is listed Orville Stewart 289220 BBA 2501 Unit I Assignment Worksheet You will complete this assignment in two parts.  Part 1 requires a short written response.  Part 2 involves completing a worksheet on which you will show your work and provide your answers to the questions listed below. Examples of how to complete these questions can be found in the Unit I Introduction and associated videos. All components of Parts 1 and 2 of the assignment will be completed using this worksheet, on which you will show your work and provide your answers to the questions listed. Once you have completed all components of the assignment, save and upload this worksheet into Blackboard. Name your file “Unit I Assignment Worksheet--YourName” (replace “YourName” with your own name). Make sure you include your name and class section at the top of this worksheet. Part 1 Tyson and Ella work at the Ruby Red Movie Theater in town. After work, they decide to watch a movie. After purchasing their tickets, they stop by the concession stand and purchase popcorn, drinks, and candy. Use the circular flow diagram to describe the purchases that Tyson and Ella made and the services and goods that were provided to them. Your response must be at least 75 words, which you can provide in the space below. Once you have completed Part 1, please complete Parts 2A–2E, which begin on the next page. Tyson and Ella worked at the Ruby Red Movie Theater. That means Tyson and Ella supply their work in the factor market, which the theater used to operate. With this labor, the theater provides salaries to both Tyson and Ella. The wages that they received they used to purchase tickets, popcorn, and drinks. The theater provided all these items. The theater then received revenues for the goods and services it offers on the product markets. Tyson and Ella paid for the goods and services that the theater provides. And this is how the circular flow works. Part 2 Note: An example of how to make these calculations is provided in the Unit I videos Opportunity Cost and Law of Comparative Advantage. Background Information As mentioned in Part 1 of this assignment, Tyson and Ella work at Ruby Red Movie Theater. Tyson can produce 100 bags of popcorn or 50 hot dogs in one hour. His coworker, Ella, can produce 100 bags of popcorn or 30 hot dogs in an hour. Answer the following five questions based on this information. Remember to show your work. Production By Hourly Production Tyson Ella Bags of Popcorn Or 100 100 Hot Dogs 50 30 Part 2A If Tyson and Ella attempted to produce both popcorn and hot dogs, how many bags of popcorn and hot dogs could each produce individually per hour? What would be the total number of bags of popcorn and hot dogs produced per hour by the two workers combined? (Show your work below.) Each Trying to Produce Both Production of Popcorn Production of Hot Dogs Tyson 50 25 Ella + 50 + 15 Total 100 40 Part 2B Calculate the opportunity cost of producing bags of popcorn for each worker. (Show your work.) Opportunity Cost of Popcorn Tyson: Hot Dogs Made 25 ÷ Bags of Popcorn Made 50 = 0.5 For every 1 bag of popcorn Tyson makes, he sacrifices 0.5 hot dogs. Ella: Hot Dogs Made 15 ÷ Bags of Popcorn Made 50 = 0.3 For every 1 bag of popcorn Ella makes, she sacrifices 0.3 hot dogs. Opportunity Cost of Producing Popcorn Tyson 0.5 Ella 0.3 Question Answer (Tyson or Ella) Who has lowest opportunity cost of producing popcorn? Ella Part 2C Calculate the opportunity cost of producing hot dogs for each worker. (Show your work.) Opportunity Cost of Hot Dogs Tyson: Bags of Popcorn Made 50 ÷ Hot Dogs Made 25 = 2 For every 1 hot dog Tyson makes, he sacrifices 2 bags of popcorn. Ella: Bags of Popcorn Made 50 ÷ Hot Dogs Made 15 = 3.33 For every 1 hot dog Ella makes, she sacrifices 3.33 bags of popcorn. Opportunity Cost of Producing Hot Dogs Tyson 2 Ella 3.33 Question Answer (Ella or Tyson) Who has lowest opportunity cost of producing hot dogs? Tyson Part 2D Determine how many bags of popcorn should be produced per hour by each worker. (Show your work). Who should specialize in producing popcorn? Tyson Who should specialize in producing hot dogs? Ella Specialization Production of Bags of Popcorn Production of Hot Dogs Tyson 0 50 Ella 100 0 Total Production With Specialization 100 50 Total Without Specialization 100 40 Difference 0 +10 Part 2E What potential ethical issues could arise from making the decision to have both employees specialize in producing popcorn or hot dogs? Name and explain at least two issues. There are two ethical issues I can gather from this. (1 ) Increased Dependency, (2) Monotonous work. Ethical Issues 1: Increased Dependency: Because both employees are specialized in one of each good, the employer will become dependent on both employees. When both employees can produce the goods without specialization, the employer's dependence on each employee will be reduced. Because when one of those employees has a no-show day at work, both products can be manufactured by another employee. But when employees specialize in producing one good, that employer must make sure both employees show up to work. If either one of them has a no-show day, only one of the two goods will be produced. Ethical Issues 2: Monotonous Work: Having two employees specialized in producing the good. Employees will only have the opportunity to make the product they specialized in. This can make employees bored and also dissatisfied. Also, this can hurt productivity along with company efficiency. Reference McEachern, W. A. (2019). Micro ECON6: Principles of microeconomics. Cengage Learning. https://online.vitalsource.com/#/books/9781337671828 Orville Stewart BBA 2501 Unit II Assignment Worksheet This worksheet is intended to help you develop the information you will use to complete your Unit II Assignment. Completing only this worksheet does not constitute completion of the Unit II Assignment. You need to complete all parts of the assignment, which also include writing an essay about the information you obtain in this worksheet. You will copy and paste your essay at the end of this document where indicated, and then upload your assignment via SafeAssign. Instructions: 1. Complete the Unit II Worksheet. 2. Use your Unit II Worksheet responses to help you formulate your ideas for writing your essay; you are expected to expand on these questions when writing your essay. 3. Include your graphs in the areas indicated in this worksheet. 4. Copy and paste your essay in to this worksheet, then upload the entire assignment via SafeAssign. Part 1 Given the quantity of total movie tickets and total concession stand items consumed in a month and the total utility derived at Ruby Red Movie Theater for each, calculate the marginal utility and the marginal utility per dollar for movie tickets and average concession stand items. Step 1: Calculate marginal utility and marginal utility per dollar for movie tickets. Quantity of Tickets Consumed Total Utility Marginal Utility Movie Ticket Price Marginal Utility Per Dollar for Movie Tickets 0 0 --- --- --- 200 150 0.75 $10.00 0.075 400 275 0.625 $10.00 0.063 600 375 0.5 $10.00 0.05 800 450 0.375 $10.00 0.038 1,000 500 0.25 $10.00 0.025 1,200 525 0.125 $10.00 0.013 1,400 525 0 $10.00 0 Step 2: Calculate marginal utility and marginal utility per dollar for concession stand items. Quantity of Concession Stand Items Consumed Total Utility Marginal Utility Average Item Price Marginal Utility Per Dollar for Concession Items 0 0 --- --- --- 400 200 0.05 $15.00 0.033 800 375 0.438 $15.00 0.029 1,200 525 0.375 $15.00 0.025 1,600 650 0.312 $15.00 0.021 2,000 750 0.25 $15.00 0.167 2,400 825 0.188 $15.00 0.013 2,800 875 0.125 $15.00 0.008 Part 1 Question 1: What quantity combination of movie tickets and concession stand items would maximize utility? Your Answers: 1200 Quantity of Movie Tickets 2400 Quantity of Concession Stand Items Part 1 Question 2: What is the price of movie tickets and average price of concession stand items? Your Answers: 10 Movie Ticket Price $15 Concession Stand Items Average Price Part 2 Given the quantity of total movie tickets and total concession stand items consumed in a month and the total utility derived at Ruby Red Movie Theater for the change in movie ticket prices, calculate the marginal utility and the marginal utility per dollar for movie tickets and concession stand items. Step 1: Calculate marginal utility and marginal utility per dollar for movie tickets. Quantity of Tickets Consumed Total Utility Marginal Utility Movie Ticket Price Marginal Utility Per Dollar for Movie Tickets 0 0 --- --- --- 200 150 0.75 $12.00 0.063 400 275 0.625 $12.00 0.052 600 375 0.5 $12.00 0.042 800 450 0.375 $12.00 0.031 1,000 500 0.25 $12.00 0.021 1,200 525 0.125 $12.00 0.010 1,400 525 0 $12.00 0 (Continue on next page) Step 2: Calculate marginal utility and marginal utility per dollar for concession stand items. (Note: The information here has not changed from Part 1, Step 2.) Quantity of Concession Stand Items Consumed Total Utility Marginal Utility Average Item Price Marginal Utility Per Dollar for Concession Items 0 0 --- --- --- 400 200 0.5 $15.00 0.033 800 375 0.438 $15.00 0.029 1,200 525 0.375 $15.00 0.025 1,600 650 0.313 $15.00 0.021 2,000 750 0.25 $15.00 0.017 2,400 825 0.188 $15.00 0.013 2,800 875 0.125 $15.00 0.008 Part 2 Question 1: What quantity combination of movie tickets and concession stand items would maximize utility now that the price of movie tickets has changed? Your Answers: 1000 Quantity of Movie Tickets 1600 Quantity of Concession Stand Items Part 2 Question 2: What is the price of movie tickets? Your Answer: 12 Movie Ticket Price Part 3 Given the total quantity of movie tickets and total concession stand items consumed in a month and the total utility derived at Ruby Red Movie Theater for the change in concession stand prices, calculate the marginal utility and the marginal utility per dollar for movie tickets and concession stand items. Step 1: Calculate marginal utility and marginal utility per dollar for movie tickets. (Note: The information here is the same as in Part 1, Step 1.) Quantity of Tickets Consumed Total Utility Marginal Utility Movie Ticket Price Marginal Utility Per Dollar for Movie Tickets 0 0 --- --- --- 200 150 0.75 $10.00 0.075 400 275 0.625 $10.00 0.063 600 375 0.5 $10.00 0.05 800 450 0.375 $10.00 0.038 1,000 500 0.25 $10.00 0.025 1,200 525 0.125 $10.00 0.013 1,400 525 0 $10.00 0 (Continue on next page) Step 2: Calculate marginal utility and marginal utility per dollar for concession stand items. Quantity of Concession Stand Items Consumed Total Utility Marginal Utility Average Item Price Marginal Utility Per Dollar for Concession Items 0 0 --- --- --- 400 200 0.5 $20.00 0.025 800 375 0.438 $20.00 0.022 1,200 525 0.38 $20.00 0.019 1,600 650 0.313 $20.00 0.016 2,000 750 0.25 $20.00 0.013 2,400 825 0.188 $20.00 0.009 2,800 875 0.125 $20.00 0.006 Part 3 Question 1: What quantity combination of movie tickets and concession stand items would maximize utility now that the average price of concession items has changed? Your Answers: 1000 Quantity of Movie Tickets 400 Quantity of Concession Stand Items Part 3 Question 2: What is the average price concession stand items? Your Answer: 20 Concession Stand Items Average Price Part 4 Answer the following from the calculations you made above: Step 1: In regard to movie tickets, report the price and quantity you calculated in Questions 1 and 2 from Parts 1 and 2. Movie Tickets Price Quantity Part 1: Question 1 and Question 2 $10 1200 Part 2: Question 1 and Question 2 $12 1000 Task: Graph the demand curve for movie tickets from the information above. Provide a copy of your graph in the box below. You can use a computer program such as Microsoft Excel or even draw the demand curve for movie tickets by hand, then take a clear, easy-to-read photo of it and insert it. Be sure to resize your graph or photo so that it completely fits in the box. Step 2: In regard to concession stand items, report the price and quantity you calculated in Questions 1 and 2 from Parts 1 and 2. Concession Stand Items Average Price Quantity Part 1: Question 1 and Question 2 $15 2400 Part 2: Question 1 and Question 2 $15 1600 Task: Graph the demand curve for concession stand items from the information above. Provide a copy of your graph in the area below. You can use a computer program such as Microsoft Excel or even draw the demand curve for concession stand items by hand, then take a clear, easy-to-read photo of it and insert it. Be sure to resize your graph or photo so that it completely fits in the box. Part 5 Given the price and quantity information below, graph the supply curve for movie tickets and concession stand items on separate graphs. Step 1: Graph the supply of movie tickets given the prices and quantities supplied below. Movie Ticket Prices and Quantity Supplied Movie Ticket Price Quantity Supplied of Movie Tickets $2 1,800 $3 1,800 $4 1,800 $5 1,800 $6 1,800 $7 1,800 $8 1,800 $9 1,800 $10 1,800 $11 1,800 $12 1,800 $13 1,800 $14 1,800 $15 1,800 Insert graph here: To create your graph, you can use a computer program such as Microsoft Excel or even draw the demand curve for movie tickets by hand, then take a clear, easy-to- read photo of it and insert it. Be sure to resize your graph or photo so that it completely fits in the box. Part 5 Question 1: Why is the quantity supplied of movie tickets the same regardless of the price of movie tickets? Enter your response in the box below. When there is a constant amount of ticket supply by the providers, prices will not changes. It is not possible to alter the quantity, which has to do with the capacity constraint. Step 2: Graph the supply of concession stand items given the prices and quantities supplied below. Concession Stand Item Prices and Quantity Supplied Average Concession Stand Price Quantity Supplied of Concession Stand Items $1 500 $2 700 $3 900 $4 1,100 $5 1,300 $6 1,500 $7 1,700 $8 1,900 $9 2,100 $10 2,300 $11 2,500 $12 2,700 $13 2,900 Draw or insert graph here: (Make sure your graph fits entirely in the box.) Part 6 Graph the supply and demand for movie tickets and concession stand items. Step 1: Graph the supply and demand for movie tickets on one graph. Draw or insert graph here: (Make sure your graph fits entirely in the box.) Step 2: Estimate the equilibrium price and quantity for movie tickets: Equilibrium Price: ___________$1__________ Equilibrium Quantity: ____________1800____________ Step 3: Graph the supply and demand for concession stand items on one graph. Draw or insert graph here: (Make sure your graph fits entirely in the box.) Step 4: Estimate the equilibrium price and quantity for concession stand items: Equilibrium Price: ______________$15_____________ Equilibrium Quantity: __________3,000______________ Supply and Demand Orville R Stewart Columbia Southern University Principles of Microeconomics, BBA 2501 Professor Hovey 08/08/2021 Supply and Demand Whether locally or globally, any business will see a change in demand and supply, and Ruby Red Theater is no exception.. However, those changes usually occur for many different reasons. And for the Ruby Red Theater manager, it was no different. The manager notices a decrease in items from the concession stand and movie tickets purchased for the theater for the last year. This decrease in sales had some concern for the manager, so he seeks advice from a private economic consultant. For any business, the supply and demand charts are vital when looking for an insight to help with the visual graph, and so was it for Ruby Red Theater. Management will use this visual graph to determine their business pattern. The charts are to understand the impact on the business better. It is vital to understand the law of supply and demand. By graphing the supply and demand by an individual, there will be factors to consider. When analyzing the law of demand, it explained that the number of goods purchased by a customer would vary over a period.. According to (The Law of Supply and Demand, 2000), "Any given moment, a too high price will leave disappointed would-be sellers with unsold goods, while a too low price will leave disappointed buyers without the goods they wish to buy." When analyzing the data for Ruby Red Theater, The best recommendation is that the managers use the marginal utility and marginal utility for each dollar of their movie tickets and concessions stand purchase because there is a change in the movie tickets price increases from $10 to $12. This increase makes the quantity demand decrease from the numbers from 1200 to 1000 in movie tickets. But on the other hand, this will allow the concession demand not to change, only if the average price stays at 15 dollars. Furthermore, the chart data is vital when you want to know the relationship between the price and the demand for the firm. When economic chart the data using the demand curve, this shows the relationship between the price of the good and how much of a product consumers are willing to buy at a cost (www.fee.com). Other factors than the price may also affect the demand for the movie tickets, and concession items include income and substitutes. When there is a change in customers' income, environmental changes will also affect supply and demand(www.fte.org). When the demand for movie tickets decreased because there were changes in the price. But when the price increase but does not fit into a budget for a customer, this will result in them restrain from visiting a movie theater and buying concession items. When customers have a low week in wages, they will often save their money. But if real income increases, then there will be purchasing power. But when customers stay home and do not go out to the movie theater, this will result in the movie tickets decrease due to substitutes. There are many substitutes for visiting the movie theater, for example, streaming devices and applications like Netflix. When looking at the theater, concession items would decrease if the capacity is low in the movie theater. Most customers typically buy concession items, like popcorn and drinks to eat while watching the movie. Concession items will receive a direct price impact also. When concession items price increase, consumers will think twice about purchasing a drink or snacks. A shift will make the demand curve occur, but any other factor other than a price and the demand of products will be affected. Then the consideration of the law of supply will apply. The Law of Supply for producers stated. So that producer can directly sell related to its price. When charting the law and supply, the good thing for a firm is that the data will be captured on a supply curve. But the Supply Curve will experience shifts and movements because of factors like resource price and price of the other goods(www.fee.com). If there is an increase in the resource price, then the cost will increase for producing the item and decrease the supplied amount. But if there is no movement in the movie tickets prices, the producer sells a constant amount of movie tickets. Furthermore, it may not be possible to change the quantity because capacity is a constraint. When the Ruby Red Theater sees an increase in their concession items sales, there is an increase in items sold. For this to happen! It is because the producer is willing to produce and supply the concession that will increase profit for the business. When you have the demand and supplies matched, then equilibrium will occur(McEachern, 2019). The cost of Ruby Red Theater tickets will affect the equilibrium price by decreasing on an average of $1 or $2 and having $1800 in the theater movie tickets. The equilibrium price then will affect the concession items to occur at 15 dollars. Also, there will be an average of 3000 concessions items. Also, there will be an average of 3000 concessions items. By this happening, this tells you that the market is stable. But there will also be a shift with the supply and demand, but only if there is movement other than price when there is a decrease in supply and demand. The shift will be toward the left on the graph for supply and demand. Also, equilibrium quantity decreases. Demand increase and supply decrease will increase the equilibrium price. Furthermore, a decrease in equilibrium price occurs, resulting in the demand decrease and supply increase The fact is that supply and demand affect all businesses. And Ruby Red Theater saw a demand for movie tickets and also concession items over the past year. Therefore, when charting patterns that include quantity and price, there is a factor that will determine substitution, price increases, and household income. Household members will limit their spending when there is a price increase. But when there is an increase in household income, the demand for other products, like movie tickets and concession items, will gradually rise. Reference Demand, Supply, and the Market; Retrieved from: ww.fte.org/teachers/teacher-resources/lesson McEachern, W. A. (2019). Micro ECON6: Principles of microeconomics. Cengage Learning. https://online.vitalsource.com/#/books/9781337671828 The Law of Supply and Demand: Retrieved from: www. fee.org/articles/the-law-of-supply-and- demand. Unit III Assignment Worksheet Background Information The Ruby Red Movie Theater in town is in jeopardy of having to close its doors because it is unable to generate enough total revenue. In an effort to generate more total revenue, the movie theater manager decided to change the prices this month for drinks, popcorn, candy, hot dogs, and movie tickets. The manager would like for you to analyze the data that has been collected to help decide if the decisions to change the prices were correct and, if not, what should be done to prices to generate more total revenue. Be sure to answer all of the questions in this worksheet. Question 1 Information regarding the community’s average income and movie ticket sales at the Ruby Red Movie Theater for both last year and this year are presented below. Use this information when answering questions A–C, below. Last Year This Year Community’s Average Income $55,800 $57,474 Movie Ticket Sales 4,980 5,021 A. Calculate the Income Elasticity of Demand for movie tickets. (Show your work. You can type it in the box below, or write it out by hand, take a picture, and insert the picture in the box. Make sure it fits in the box. NOTE: These options apply to all “Show your work” responses.) Step 1: ($55,800+$57,474) (4980-5021) ____________________ x ________________ 2 (55,800-57,474) _____________________ (4980+5021) _____________________ 2 Step 2: $113,274 ___________________ 2 -41 __________________ x _______________ -1,674 10,001 ________ 2 Step 3: $56,637 -41 ______________ X ____________ 5,000.5 -1,674 Step 4: 11.32626737326267 x 0.02449223 =0.2774055455474453 B. Are movie tickets considered to be inferior goods, normal goods, or unit (unitary) goods in this town? Explain why. Movie tickets are considered a normal good. When you look at the normal good, it sees an increase in its demand when the price changes. The income and elastically were in a positive light and average 0.27. Income elasticity results positive but less than 1%, indicating that movie tickets in town are considered normal goods. C. A new firm is relocating to the city and adding a large number of above average salaries. Will the number of movie ticket sales for the theater increase, decrease, or remain constant? Base your answer on information you answered in part B above. When looking at the movie tickets, it will increase in demand because they are a normal good. When an increase in income or salary occurs, then the demand for tickets will also increase. The fact is when households have more money to spend. Then they demand more in normal goods, for example, movie tickets. Continue on next page Question 2 The manager at Ruby Red Movie Theater decided to change the prices of concession stand items as well as tickets this month in an effort to increase revenues. Below, you are provided with prices for last month and this month as well as the quantities demanded for both months. Use this information when answering questions A–H below. Price Quantity Demanded Item Last Month This Month Last Month This Month Large Drink $6.00 $5.50 150 161 Large Popcorn $7.50 $8.00 125 101 Small Drink $2.50 $2.00 75 80 Small Popcorn $5.00 $5.25 45 39 Candy $4.00 $3.50 57 68 Hot Dog $5.00 $5.25 35 36 Movie Ticket $8.00 $9.00 428 300 A. Calculate the total revenues earned by the theater last month and this month (Show your work.) Last Month: Large Drinks - $6.00 x 150=$900.00 Large Popcorn- $7.50 x 124=$937.50 Small Drink- $2.50 x 75= $187.50 Small Popcorn- $5.00 x 45 = $225.00 Candy - $4.00 x 57 = $228.00 Hot Dog - $5.00 x 35= $175.00 Movie Tickets - $ 8.00 x 428 = $3,424.00 This Month Large Drink - $5.50 x 161 = $885.50 Large Popcorn - $8.00 x 10 = $808.00 Small Drink - $2.00 x 80 = $160.00 Small Popcorn - $5.25 x 39 = $204.75 Candy $3.50 x 68 = $238.00 Hot Dog - $5.25 x 36 = $189.00 Movie Tickets - $9.00 x 300 = $2,700.00 Total revenues last month = $6077 Total revenues this month = $5185.25 B. Calculate the price elasticity of demand for large drinks. (Show your work.) Step 1 (550+6.00)/2 x (151-150) _________ _________ (161+150)/2 5.50-6.00 Step 2 6.00-5.50 x 0.5 __________ __________ Step 3 150+161 x 155.5 __________ ___________ 2 Step 4 161-150 x 11 _________ ____________ Step 5 0.03697749 x 22 = 0.81350478 Is the price elasticity of demand for large drinks price elastic, inelastic, or unit (unitary)? Briefly explain why in the box below. Answer = The value is less than 1, this make the elasticity of demand inelastic Continue on next page C. Calculate the price elasticity of demand for large popcorn. (Show your work.) Step 1: ($7.50+$8.00)/2 x (125-101) _____________ __________ (125+101)/2 (7.50-8.00) Step 2: 15.50/2 x 24 __________ ------------------ 226/2 -0-5 Step 3: 7.75/113 x 24/-05 Step 4: 0.0685840707964602 x -48 = - 3.29203539823009 Is the price elasticity of demand for large popcorn price elastic, inelastic, or unit (unitary)? Briefly explain why in the box below. Answer = The large popcorn price of demand is greater than 1. This results in a high response to the change in price. To understand this is that the price elasticity for large popcorn is elastic. Because there is a negative sign, this would indicate an increase of 1% and could decrease around 3.29%. Only if prices decrease by 1% the quantity demanded would increase. Continue on next page D. Calculate the price elasticity of demand for small drinks. (Show your work.) Step 1: (2.50+2.00)/2 x 75-80 _____________ _________ (75+80)/2 2.50-2.00 Step 2: 4.50/2 x -5 _________ ___________ 155/2 0.5 Step 3: 2.25/77.50 x -10 Step 4: 0.0290322580645161 x –10 =0.2903225806451613 Is the price elasticity of demand for small drinks price elastic, inelastic, or unit (unitary)? Briefly explain why in the box below. Answer = Because the small drink falls between 0 to 1, the demand price elasticity is inelastic Continue on next page E. Calculate the price elasticity of demand for small popcorn. (Show your work.) Step 1: (5+5.25)/2 x 45-39 __________ __________ (45+39)/2 5-5.25 Step 2: 10.25/2 x 6 _________ ___________ 84/2 -0.25 Step 3: 5.125 _________ x -24 42 Step 4: 0.1220238095238095 x –24 = 2.92857428571429 Is the price elasticity of demand for small popcorn price elastic, inelastic, or unit (unitary)? Briefly explain why in the box below. Answer = The small popcorn price elasticity of demand at the theater is elastic as it is greater than 1. Continue on next page F. Calculate the price elasticity of demand for candy. (Show your work.) Step 1: (4 +3.50)/2 $7.68 _________ x _______ (57+68)/2 4-3.50 Step 2: 11.50/2 -11 X _________ _______ 125/2 0.5 Step 3: 5.75 X -22 ___________ 62.5 Step 4: 0.092 x -22 = -2.024 Is the price elasticity of demand for candy price elastic, inelastic, or unit (unitary)? Briefly explain why in the box below. Answer = The candy price elasticity of demand for the theater is elastic as it is greater than 1. Continue on next page G. Calculate the price elasticity of demand for hot dogs. (Show your work.) Step 1: (5+5.25)/2 35-36 __________ x ________ (35+36)/2 5-5.25 Step 2: 10.25/2 -1 ___________ x __________ 71/2 0.25 Step 3: 5.125 _________ x 4 35.5 Step 4: 0.1443661971830986 x 4 = 0.5774647887323944 Is the price elasticity of demand for hot dogs price elastic, inelastic, or unit (unitary)? Briefly explain why in the box below. Answer = The hot dog's price elasticity of demand for the theater is inelastic as less than 1. Continue on next page H. Calculate the price elasticity of demand for movie tickets. (Show your work.) Step 1: (8.00 +9.00)/2 428-300 ______________ x ___________ (428+300)/2 8.00-9.00 Step 2: 17/2 128 _____________ x ___________ 728/2 -1 Step 3: 8.5 ____________ x -128 364 Step 4: 0.0233516483516484 x –128 + -2.989010989010989 Is the price elasticity of demand for movie tickets price elastic, inelastic, or unit (unitary)? Briefly explain why in the box below. Answer = The movie tickets price elasticity of demand for the theater is elastic as it is greater than 1 Continue on next page Question 3 Based on the relationship between price elasticity of demand and total revenues, evaluate whether the individual price changes the manager made were correct or not. Remember, Ruby Red Movie Theater wants to increase total revenue. A. Was the decision to decrease the price of large drinks appropriate to increase total revenues? Why, or why not? Briefly explain in the box below. Answer = No. By decreasing the price for the large drink leads to a loss to revenue. Because the price elasticity demand fall below 1. And if you looked at the revenue last month was $900 and this month was $885.90. B. Was the decision to increase the price of large popcorn appropriate to increase total revenues? Why, or why not? Briefly explain in the box below. Answer = No. the price elasticity of demand stands at 3.29. Because of this, it makes its demand elastic. If the theater increase in price, this would cause a loss in revenue. Looking at last month's revenue and this month's revenue, the differences are $937.50 and $808.00. C. Was the decision to decrease the price of small drinks appropriate to increase total revenues? Why, or why not? Briefly explain in the box below. Answer = Because there were no decreases in price, resulting in the business losing revenue. Also, the PED was below 1% at 0.29. As a result, the total business revenue went from $187.50 to $160. D. Was the decision to increase the price of small popcorn appropriate to increase total revenues? Why, or why not? Briefly explain in the box below. Answer = No, because there was a demand for a small popcorn, this was affected by the price going up. The theater lost revenue. When looking at last month's revenue for the theater, it stands at $225, and this month was at $204.75. And the PED at 2.92 results in a highly responsive because of the price increase. E. Was the decision to decrease the price of candy appropriate to increase total revenues? Why, or why not? Briefly explain in the box below. Answer = Yes, because of the revenue for the candy increase from $228 to $238 this month. And the PED was at 1,32m, which makes it above 1. this makes the demand elastic. F. Was the decision to increase the price of hot dogs appropriate to increase total revenues? Why, or why not? Briefly explain in the box below. Answer = Yes, There was an increase in revenue from $175 to $189 for hot dogs. This allows the PED to be below 1. The demand is inelastic. Whenever the price increase, then the revenue increased. G. Was the decision to increase the price of movie tickets appropriate to increase total revenues? Why, or why not? Briefly explain in the box below. Answer = No, by the theater increasing the movie tickets, this decreases the demand. This affects their revenue from $3424, from last month to $2700 this month a reduced in revenue. Also, the PED is greater than 1, which shows an increase in the price, and the result causes a high reaction. Tracy, the movie theater manager, wants to analyze the data she collected. Tracey will estimate some values that she will need to help her analyze the data. The workers contribute to both the areas and have an estimated number of workers she should hire so that her theater business can earn and profit the most. These data were organized using tables with workers' days, the cost of items, and workers' wages. For Tracy to analyze these data, the shoe would need to estimate the following values: Marginal Product (MP, Average Product(AP), Average value product and marginal value product, and Total value product. With these values, they will play a vital role in her estimating the optimal theater level of workers(L). Which is the average product (AP) expressed as the per unit (TP) output produced. When looking at a marginal product, this is an additional output produced when a business manager hires one additional worker. Below is how their estimation explain: AP= TP/L Looking at table 1, the value of AP when TP is 100, and the workers (L) is two is: AP = 100/2 = 50 Because TP is 400 and workers is four is: AP = 400/4 = 100 Looking at table 2 for theater movie tickets, TP is 227, and workers are one is: AP = 227/1 = 227 For table 2 movie tickets, TP did rise to 615, and workers are two is." AP = 615/2 = 307.5 Looking at the rest of the values of AP is determined with table 1 and also table 2. Here is how the marginal product is determined as: (Marginal product) MP = ∆ ∆L Ln - Ln-1 Because a change in TP is divided by the change in theater workers furthermore, in table 1, the TP changes from 0 to 100. Also, workers change from 0 to 2. MP= ∆ ∆ L 2-0 2 MP is 50 TP will change from 100 to 400, and also workers change from 2 to 4, MP is MP = ∆ L 6-4 2 MP is 150. Also, TP changes from 400to 750, and theater workers change from 4 to 6. MP is: MP = ∆ ∆L 8 -6 2 MP is 175. Also, when TP remains the same and workers changes from 20 to 22 MP is: MP = ∆L 22- 20 2 MP =0 For table 2, for the theater movie tickets, the methods are similar to estimate the MP. Because when TPO varies from 227 to 615 and workers from 1 to 2 MP is; MP = ∆L 2 - 1 1 When looking at table 2, because the variation in the labor remains the same, which is 1, MP will be similar because of the change in total products only. And because TP did not change, the MP is zero and is: TPN = 1800 and TP(n-1) = 18-00, MP=0. But if TP falls this decrease, PM is: TPn=1800, Tp(b-1) = 1789, MPO = 1800 - m1789 = -11 This will result in Mp becomes negative. Now we are going to look at another column of total value (TVP). The total value will determine the dollar value of the total output. The total value gives the money value to the total product. Also, the AVP is similarly alone with the MVP. These are the dollar value for the AP and MP. These are the value of the money of workers' AP and MP, in this order. To estimate these is done by how you multiplication for the price of goods sold. And this is the value of TP workers within the theater concession stand for the items price and multiplied total product. Which is: TVP = TP P also: AVP=P AP ; MVP = MP P The diminishing will return, it shows in the production of the output. This is because when the input rises, so does the output. But in the long run, the rise in the output will begin to fall when there is a rise in labor/worker is hired. Using the DMR to analyze, Tracy will see the range of workers from where the DMR starts, indicating that the increment in output begins to fall after employing one or more labor. This will let her know when to stop hiring new workers in production also in sales. Furthermore, in the theater concession stands, DMR starts at the level of 6 workers, leading to a rise in the level of workers. This will result in the long run the falling of the MP or lower rise in TP. Looking at the movie tickets, DMR will start at a level of 2 workers. This is because when you raise the workers by one more, this will decrease MP. When looking at the optimal level/number of workers, this is estimated at the level of the theater workers given is similar to the value of the extra product added to the total output by hired workers. So these are the last analysis for Tracy, the manager. The concession stands optimal level/number for the workers that should be at the same level where the wage and MVP are at $120. So if Tracy went and hired 18 workers at this level, MVP and wage are the same $120, and the number of popcorn buckets produced/sold will be equal to the total product 18 levels of workers, which is 1280. The movie ticket would be similar, Looking at the optimal level number when it comes to workers. Should be a level in line where the wage and MVP, which is $120. The number of movie tickets produced/sold will equal the total product at eight levels of the theater workers, at $1,800. Reference McEachern, W. A. (2019). Micro ECON6: Principles of microeconomics. Cengage Learning. https://online.vitalsource.com/#/books/9781337671828 Unit IV Assignment Worksheet This worksheet is intended to help you develop the information you will use to complete your Unit IV Essay. You are expected to include the completed tables in your Unit IV Essay. The additional questions after the tables are intended to help you formulate your ideas concerning what you will write in your essay. NOTE: Just completing this worksheet does not constitute completing the Unit IV Assignment. The information from the worksheet must be incorporated into your essay submission. Follow the instructions below. Instructions: 1. Complete all parts of this Unit IV Assignment Worksheet. 2. Answer the questions listed after the tables; these will help you formulate your ideas for writing the essay part of this unit’s assignment. You are expected to expand on these questions in your writing. 3. Include the tables and your question responses from this worksheet as an appendix at the end of your essay. On the following pages, you will be provided with tables showing the different levels of output that are possible as the number of workers used per day changes. Using the information you learned from this unit’s textbook readings for this class as well as the information in the Unit IV Lesson, include the following: 1. Complete the two tables below; one is for production of concession stand item sales while the other is for production of movie ticket sales. 2. Answer all of the questions listed below each table; as mentioned, these answers will help you when formulating your thoughts for the essay part of your Unit IV Assignment. Number of Workers per Day Concession Items Produced per Day Average Product Marginal Product Average Price of Concession Items Total Value Product Average Value Product Marginal Value Product Price of Worker per Day 0 0 0 0 $8.00 $0 $0 $0 $120.00 2 100 50 50 $8.00 $800 $400 $400 $120.00 4 400 100 150 $8.00 $3,200 $800 $1,200 $120.00 6 750 125 175 $8.00 $6,000 $1,000 $1,400 $120.00 8 900 112.5 75 $8.00 $7,200 $900 $600 $120.00 10 1,025 102.5 62.5 $8.00 $8,200 $820 $500 $120.00 12 1,125 93.75 50 $8.00 $9,000 $750 $400 $120.00 14 1,200 85.71 37.5 $8.00 $9,600 $685.68 $300 $120.00 16 1,250 78.13 25 $8.00 $10,000 $625 $200 $120.00 18 1,280 71.11 15 $8.00 $10,240 $568.88 $120 $120.00 20 1,290 64.5 5 $8.00 $10,320 $516 $40 $120.00 22 1,290 58.63 0 $8.00 $10,320 $469.04 $0 $120.00 24 1,280 53.33 -5 $8.00 $10,240 $426.64 -$40 $120.00 Questions: Use these questions to help you formulate your ideas for writing the Unit IV Essay. Using the information from the table you completed, answer the following questions: 1. At what number of workers used per day does the law of diminishing marginal returns begin? How did you determine this number? The DMR (diminishing marginal returns) because it started with six workers in the theater concession stand. The result let the MP fall as more workers were hired after the six. 2. At what number of workers used per day does negative marginal returns begin? How did you determine this number? When looking at the marginal returns, it becomes negative level 24 because workers as MP were negative at this level. 3. What similarities do you see between the shape of the Average Product curve and the Average Value Product Curve? AP and AVP similarities are: (1) AP and AVP curves rise till the six levels of workers. (2) AP and AVP curves begin falling around the eight levels of workers and continue falling. 4. What similarities do you see between the Marginal Product curve and the Marginal Value Product curve? MP and MVP curve similarities are such: (1) MP and MVP curves continue rising until the six levels of workers. (2) MP and MVP curve start falling around the eight levels of workers and did not stop falling until 20 levels of workers (3) MP and MVP curves become zero at around the 22 levels of workers and become negative at a similar level of workers that is 24. 5. What is the optimal number of workers per day to use at the theater’s concession stand to produce concession stand item sales? How did you determine this optimal number? Levels 18 of workers, the marginal product value (MVP) equal to the workers wage, the total is $120. Therefore, resulting in the optimal level/number of workers is 18. Number of Workers per Day Movie Tickets Produced per Day Average Product Marginal Product Average Price of Movie Tickets Total Value Product Average Value Product Marginal Value Product Price of Worker per Day 0 0 0 0 $10.00 $0 $0 $120.00 1 227 227 227 $10.00 $2,270 $2,270 $2,270 $120.00 2 615 307.5 388 $10.00 $6,150 $3,075 $3,880 $120.00 3 935 311.66 320 $10.00 $9,350 $3,116.60 $3,200 $120.00 4 1,185 296.25 250 $10.00 $11,850 $2,962.50 $2,500 $120.00 5 1,427 285.4 242 $10.00 $14,270 $2,854 $2,420 $120.00 6 1,631 271.83 204 $10.00 $16,310 $2,718.3 $2,040 $120.00 7 1,788 255.42 157 $10.00 $17,880 $2,554.2 $1,570 $120.00 8 1,800 225 12 $10.00 $18,000 $2,250 $120 $120.00 9 1,800 200 0 $10.00 $18,000 $2,000 $0 $120.00 10 1,789 178.9 -11 $10.00 $17,890 $1,789 -$110 $120.00 11 1,757 159.72 -32 $10.00 $17,570 $1,597.2 -$320 $120.00 12 1,679 139.91 -78 $10.00 $16,790 $1,399 -$780 $120.00 Questions: Use these questions to help you formulate your ideas for writing the Unit IV Essay. Using the information from the table you completed, answer the following questions: 1. At what number of workers used per day does the law of diminishing marginal returns begin? How did you determine this number? When looking at the DMR, it started at two workers in the theater concession working. The MP starts to fall when more employees/workers are hired after 2 2. At what number of workers used per day do negative marginal returns begin? How did you determine this number? Marginal return was negative at the level of 10 levels of workers. And MP also becomes negative at this level. 3. What is the optimal number of workers per day to produce movie ticket sales? How did you determine this optimal level? Levels eight of workers, the marginal product value is equal to (W) wage of workers, which is $120. Furthermore, the optimal number/level of workers is at eight. Essay Calculation I was happy as a consultant to help Tracy, who is the Ruby Red Movie Theater manager. Tracy was worried about concession stand sales, and I was delighted to help her with the company worksheet data. I was happy that this was my field of expertise because this worksheet was a lot of calculation for me to complete the table for each day's concession items and labor produced each day. The first calculation was for the variable cost. This formula is VC= unit price of variable times the total number of variable resources. Calculating the variable cost lets us know how to buy the necessary resources for the items sold in the concession stand. It is vital because if the movie theater could not sell any item in their concession stand, this would give them a reason to buy more products. The other formula used for this table is the total cost formula. This formula is TC= fixed cost plus variable cost. For example, for the worksheet above for the movie theater, when zero units of output for the concession stand items were produced, the total cost equaled two thousand dollars. This was when one-hundred items were produced per day. That has a total cost that equaled two thousand dollars. This formula is similar to the marginal cost, but you will use the change in the total revenue rather than the change in total cost. And the formula would be MR= change in total revenue. Then you divide by the change in output. Then the following formula would be the average total cost, and the average total cost set of numbers would be different. This will be needed to complete the worksheet. This formula is ATC= total cost, then you divided by output. Finally, total revenue will be the last formula needed. And this formula is TR= this price multiplied by the quantity. Maximum Profit Level The maximum profile level for the theater generated from the concession stand is 1,290 items, with a profit of $146,480. So by looking at the calculation on the worksheets, this would be the maximum profit level. From examining the worksheet, I found that the movie theater will produce 1,290 items and have about 20 people on the job. So also, allow the theater to make a profit of $146,480 off those items. The company needs to know in order not to overproduce or to over-staff. When there is an overage, any of these places will decrease profit for the movie theater, which would result in a negative outlook for the movie theater. I came up with the conclusion by conducting all these calculations that I have to explain previously. By examining the items, they seem there would be a lot to sell, but it is possible if the theater manager Tracy, stays ahead of the company schedule. Average Price Level. When looking at the average price level for the theater concession stand items, I could say it stay at eight dollars where it was at first. Because there where no profit being made for the concession stand items. For at least when nine-hundred items sold. The current situation in the country right now, I highly think that any movie theater tickets will be selling over nine hundred concession stand items. After looking at the worksheet and using the formula, if the movie theater holds its price at eight dollars for items, it may have a negative outlook and be forced to close its doors. This is a sticky situation for Tracy, the manager of the theater. The theater leadership would need to lead her team to make the sales to correct the price. Individuals in society love to go to the movies and gravitate towards the concession stand because most people love to have a snack or two before watching the movies. Whether it be for a large cup of iced drink or buttered-up popcorn, which I like, or they may prefer crunch of candies. When people decided to head to the movie theater, they go to watch the actual movie, but they enjoy the overpriced snacks and large soda drinks. Reference McEachern, W. A. (2019). Micro ECON6: Principles of microeconomics. Cengage Learning. https://online.vitalsource.com/#/books/9781337671828 Unit V Assignment Worksheet This worksheet is intended to help you develop the information you will use to complete your Unit V Essay. You are expected to include the completed table in your Unit V Essay. The additional questions after the tables are intended to help you formulate your ideas concerning what you will write in your essay. Just completing this worksheet does not constitute completing the Unit V Assignment. The information from the worksheet must be incorporated into your essay submission. Follow the instructions below. Instructions: 1. Complete all parts of the Unit V Assignment Worksheet. 2. Answer the questions after the table; these will help you formulate your ideas for writing the essay part of your Unit V Assignment. You are expected to expand on these questions in your writing. 3. Include the tables and your question responses from the Unit V Assignment Worksheet as an appendix following the essay part of your Unit V Assignment. On the next page, you are provided with a table showing the different levels of output for concession stand items that are possible as the number of workers used changes. Also included are the price of labor, the total fixed cost per day, and the average price of concession stand items. Using the information you learned from the textbook for this class as well as the information in the Unit V Lesson: 1. Complete the table below concerning concession stand topics. 2. Answer all of the questions listed below the table. As mentioned, doing this will help you when formulating your thoughts for the essay part of your Unit V assignment. Round These Answers to the Nearest Whole Number Round These Answers to the Nearest Penny Output (Concession Stand Items) Number of Workers Employed Per Day Price of Labor Per Worker Per Day Total Variable Cost of Labor Total Fixed Costs Per Day Total Cost Per Day Average Price of Concession Stand Items Total Revenue Profit Average Variable Cost Average Fixed Cost Average Total Cost Marginal Cost Marginal Revenue 0 0 $120 0 $2,000 2,000 $8.00 0 $-2,000 0 0 0 0 0 100 2 $120 12,000 $2,000 14,000 $8.00 800 $-6,000 120 20 $140 120 $8 400 4 $120 48,000 $2,000 50,000 $8.00 2,200 $-46,000 120 1600 $125 120 $8 750 6 $120 90,000 $2,000 92,000 $8.00 6,000 $-86,000 120 2.70 $122.70 120 $8 900 8 $120 108,000 $2,000 110,000 $8.00 7,200 102,800 120 2.20 $122.20 120 $8 1,025 10 $120 123,000 $2,000 125,000 $8.00 8,200 116,800 120 2.00 $122.00 120 $8 1,125 12 $120 135,000 $2,000 137,000 $8.00 9,000 128,000 120 1.80 $121.80 120 $8 1,200 14 $120 144,000 $2,000 146,000 $8.00 9,600 137,000 120 1.70 $121.70 120 $8 1,250 16 $120 150,000 $2,000 152,000 $8.00 10,000 142,000 120 1.60 $121.60 120 $8 1,280 18 $120 153,600 $2,000 155,000 $8.00 10,240 145,260 120 1.60 $121.60 120 $8 1,290 20 $120 154,800 $2,000 156,800 $8.00 10,320 146,480 120 1.60 $121.60 120 $8 1,289 22 $120 154,680 $2,000 156,600 $8.00 10,312 146,368 120 1.60 $121.60 120 $8 1,280 24 $120 153,600 $2,000 155,600 $8.00 10,240 145,360 120 1.60 $121.60 120 $8 Questions: Use your responses to these questions to help you formulate ideas for writing your Unit V Essay. Question 1: What is the level of profit that is made by Ruby Red Movie Theater if 2 workers are employed at the concession stand and only 100 items of output are produced (sold) at the concession stand? Answer: When examining the level of profit made by the theater, if two workers are employed at the concession stand, and only 100 items of output are produced(sold) at the concession would be $-6,000. Question 1a: Should Ruby Red Movie Theater continue to operate the concession stand if only 100 concession stand items are being produced (sold) by 2 workers? Why, or why not? Answer: The movie theater should stop operating the concession stand if selling items is 100 items being produced by two workers. Because it would be a loss instead of a profit, buy the Theater Question 2: If Ruby Red Movie Theater wanted to produce (sell) 1,290 items from the concession stand, would profit be maximized? Why, or why not? Answer: If the Movie Theater wants to produce(sell) 1,290 items from its concession stand. The theater profit would not be maximized, and this is because the total cost exceeds the level of revenue being generated, which result in a company loss of -$146,480 Question 3: At what level of output and labor input are concession stand profits maximized for Ruby Red Movie Theater? What are two ways you could tell if this was correct from the table data? Answer: Based on the data examine, at no level of output and labor input that the theater concession stand profits were maximized. And this is because the total cost incurred for the theater is more than the total revenue generated. Question 4: How are average total cost and marginal cost related to marginal product and average product? Answer: For the marginal product, this happens when there was a change in the total product when you divided it by the change in the quantity of resources. Furthermore, the average product is the total product when it is divided by economic resource quantity. Also, average products will come to its peak when it intersects with the marginal product curve. The marginal cost is less than the average variable cost, and the result will decrease the average cost. On the flip side, if the marginal cost is greater, the average variable cost will increase. Question 5: What do you notice about marginal revenue and the price of output (average price of concession stand items in this case)? Answer: When a company calculates marginal revenue, this is done by dividing the change in total revenue because of the change in total output quantity. Therefore, the company sale price for a single additional item that sold equals marginal revenue. Question 6: What is the maximum level of profit that can be generated from concession stand items? Answer: When looking at the profit-maximizing level that can be generated from the company concession stand is 1,290 items, with a profit of $146,480 Next Step: Once you have completed the table and answered questions 1–6 above, your next step will be to write your essay. The information from these questions should be used when writing the essay. See Unit V Assignment instructions. Unit VI Assignment Background Information Ruby Red Theater is now starting to work on its marketing plan to draw more customers into the theater. Manager Tracy has provided you with the following information and asked for your help: · There are four movie theaters in the town (Ruby Red, Grayson's Guild, Ryne's Reel 2 Reel, and Garrett's Dollar Movies). · The city has passed a law banning any other movie theaters from building within the city limits. · All movie theaters offer similar types of concession stand items at similar prices. · The average ticket prices per movie at each theater are: Movie Theater Average Ticket Price Ruby Red Movie Theater $10.00 Grayson’s Guild Movie Theater $8.00 Ryne’s Reel 2 Reel Movie Theater $8.00 Garrett’s Dollar Movies $1.00 · The first movie and last movie start times for the four theaters are: Movie Theater First Start Time Last Start Time Ruby Red Movie Theater 12:00 noon 11:00 p.m. Grayson’s Guild Movie Theater 10:00 a.m. 11:00 p.m. Ryne’s Reel 2 Reel Movie Theater 10:00 a.m. 11:00 p.m. Garrett’s Dollar Movies 12:00 noon 11:00 p.m. · The average number of people who purchase tickets at each movie theater in town per month is: Movie Theater Average Monthly Movie Ticket Sales Ruby Red Movie Theater 15,000 Grayson’s Guild Movie Theater 23,000 Ryne’s Reel 2 Reel Movie Theater 25,750 Garrett’s Dollar Movies 25,200 · Grayson's Guild and Ryne's Reel 2 Reel offer a special "Two-for-One Tuesday" where you can purchase two tickets for the price of one. · Grayson's Guild and Ryne's Reel 2 Reel just purchased the latest Goldby Surround Sound for their movie theaters. · You recall that your economics instructor at Columbia Southern University had presented you with a table that outlined the four market structure types and their characteristics. After searching through your old notes from Columbia Southern University, you found the table, which is presented below: Characteristic Perfect Competition Monopolistic Competition Oligopoly Monopoly Number of Firms Vast Many Few Dominant Firms One Type of Product Homogeneous Differentiated Differentiated Unique, Limited, No Close Substitute Size of Firm Relatively Small Relatively Small Average to Large Large Market Share Small Small Average/High Absolute Barriers to Entry and Exit None Low High Extreme Price-Setting Power None, Price Taker Low, Price Maker High, Price Maker High, Price Maker Long-Run Economic Profits None None Possible Possible Answer the questions on the next page. Your answers must be a minimum of 300 words in length for each question. Unit VI Assignment Part 1: Using the provided table that outlined the various characteristics of each market structure type and the information provided by Manager Tracy from Ruby Red Movie Theater, define the market structure (perfectly competitive, monopolistically competitive, oligopoly, or monopoly) for the movie theater market of this town. Discuss each market structure characteristic as it either relates or does not relate to the movie theater market for this town. Make sure you address all four market structures and each market structure characteristic in your discussion. If you need additional space, please feel free to insert an additional page. Answer: Perfect competition is a market structure with a lot of fully informed buyers and sellers. The business product is all exact, and all businesses must take or accept the market price. Meaning other companies can not influence the market price of their products. These business prices would be accurate among all in the same industries. So they have the opportunity to enter the market without any penalty. And no transaction cost. Furthermore, with perfect competition, since there are many buyers and sellers, the price will reflect the supply and demand(McEachern, 2019). When looking at Monopolistic competition, many businesses will have the same products or services that are just the same but not a complete substitute. These barriers to entry and exit would be low, and other business decisions would not affect another business. Also, they do not have the authority to raise their product prices to profit their companies. With Monopolistic competition, these business uses heavy advertising and marketing strategies(McEachern, 2019). For an Oligopoly, this is a small number of companies, and this business can not prevent other companies from influence. For a business in an oligopoly category, no one business will enjoy a significant share in their market industry. These business will be able to control prices and also lift their barriers for entry. All this is to protect themselves from any new companies that would try to come in the market share(McEachern, 2019). A monopoly is when a company will sell individual products in the market space, and this business will have total or near-total control of that particular market industry. Monopolies businesses have no competition, resulting in customers getting hurt that need products (McEachern, 2019). When looking at the town movie theaters, these are under an oligopoly structure because there are not enough movie theaters in town and a barrier established to enter the market. When looking at the monopoly structure, this would not workout out for the town. And this is because there is more than one movie theater, and the competition is fierce. McEachern, W. A. (2019). Micro ECON6: Principles of microeconomics. Cengage Learning. https://online.vitalsource.com/#/books/9781337671828 Part 2: Given the market structure you have identified for the movie theater industry in this town, what marketing ideas would you recommend for Ruby Red Movie Theater? If you need additional space, please feel free to insert an additional page. Answer: The market structure for Ruby Red Movie Theater and the movie industry in the town is an oligopoly. So the first thing is to make your business stand out in a crowd. Next, make sure your customer has a great experience when they come to your business. This allows those customers to return and spread the word to their friends and family about the great experience. When individuals spread your business by word of mouth, this is still the best way to increase your business sales. Also, with the changing technology in today's society, the movie theater can use social media outlets and email newsletters to get information that will show upcoming trailers or previews playing at the movie theater for that week. Also, implementing a reward program in which a person buys a portion of movie tickets or concession stand items would be able to get some free goodies and discounts on their next purchase. The next thing is for the movie theater to have comfortable seats and invest in some recliner chairs. Also, a clean and tidy for each movie showing in the theater. Customers do not want to enter a movie theater and see leftover loose popcorn, candy wrappers, and soda cups on the floor or in the seats. It would be a good idea also to expand the theater concession stand items with the new products that hit the market. And make sure all the favorite theater items like hot dogs, nachos, ice cream, slushes, and have these items at a reduced price. One major move is to have discounted prices if customers visit the movie theater before 5:00 pm. Also, have a discount for kids and some adult combos. The movie theater can offer healthy drinks other than sodas because you will find some customer does not drink sodas all the time. And make sure the popcorn is freshly done. After all, the worst thing is to get cold, stale popcorn. The movie theater can also have midnight movies for the weekends for adults. McEachern, W. A. (2019). Micro ECON6: Principles of microeconomics. Cengage Learning. https://online.vitalsource.com/#/books/9781337671828 Part 3 Grayson’s Guild Movie Theater has made an offer to purchase Ryne’s Reel 2 Reel Movie Theater. The merger would result in both theaters operating under the same business ownership. What problems would this merger cause for Ruby Red Movie Theater? Could the government have issues with this merger? If you need additional space, please feel free to insert an additional page. Answer: Most businesses used merges to control their market share and also to cut costs. Grayson' Guild Movie Theater and Ryne' Reel 2 Movies operate under the same management if the offer is accepted and the deal is made. The merger could cause a huge problem for Ruby Red Movie Theater. Both movie theater companies merging would be more prominent and allow their market share to increase and gain more power in the industry. This merger would be horizontal because both movie theaters operate in the same industry. Now both theaters are under the same management. The result of the merger would lead to an increase in market share and revenue because of this merger. This merger would be a Horizontal merger. When understanding Horizontal mergers, this is a way to cut out other competitions in your industries, which can result in having one powerful company instead of two competitors(McEachern, 2019). But there is a safeguard for these mergers by the government. The Department of Justice or the FTC typically reviews these types of mergers. In some cases, they will challenge the merger in courts if they believe the citizens will be at a loss from a lack of competition. McEachern, W. A. (2019). Micro ECON6: Principles of microeconomics. Cengage Learning. https://online.vitalsource.com/#/books/9781337671828 Your assignment is to provide a final report for Ruby Red Movie Theater in which you address the concerns that have been outlined in the previous six units of this class, indicating any outsourcing or vertical integration options Ruby Red Movie Theater may be able to implement. Be specific regarding the analysis you performed in each area of study. Your recommendations for improvements for the theater should be based on economic theory and your analysis. Your complete analysis of the theater, the industry, and opportunities that may exist are crucial for the future profitability of the theater. Revise the information from previous assignments as needed and pull everything together to create a cohesive, comprehensive report. What this means is that this final report should be original updated work, though it is based on your previous assignments. Do not just copy and paste your previous assignments into one paper. Also, be sure to incorporate any suggestions your instructor made in your previous assignments. New information will be added for Unit VII, which will focus on the information provided in this unit. The topics for this section will include why firms exist, the factors that create a situation where vertical integration is desirable, and why firms would use outsourcing, as well as how this information can be applied to the Ruby Red Movie Theatre. The following is a list of items and sections you should include in your final report. Replace the unit numbers with appropriate titles for the information in each section. • Title page • Table of contents • Introduction • Unit I • Results write-up from Unit I, including recommendations • Unit II • Results write-up from Unit II, including recommendations • Unit II Tables • Unit II Graphs • Unit III • Results write-up from Unit III, including recommendations • Unit IV • Results write-up from Unit IV, including recommendations • Unit IV Tables • Unit V • Results write-up from Unit V, including recommendations • Unit V Tables • Unit VI • Results write-up from Unit VI, including recommendations • Unit VII • Results write-up from Unit VII, including recommendations • Conclusions and final recommendations • Reference page • Insert labeled tables after the reference page