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The college of business at Kerouac University is planning to begin an online MBA program. The initial start-up cost for computing equipment, facilities, course development and staff recruitment and development is $400,000. The college plans to charge tuition of $20,000 per student per year. However, the university administration will charge the college $10,000 per student for the first 100 students enrolled each year for administrative costs and its share of the tuition payments.
a. How many students does the college need to enroll in the first year to break-even?
b. If the college can enroll 80 students the first year, how much profit will it make?
c. The college believes it can increase tuition to $25,000, but doing so would reduce enrollment to 50. Should the college consider doing this?
In equilibrium, with diminishing marginal products, the slope of the PPF is equal to:
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A firm has $1,900,000 in sales, a Lerner index of 0.55, and a marginal cost of $50, and competes against 800 other firms in its relevant market. What price does this firm charge its customers? By what factor does this firm mark up its price over marg..
Recently, the House of Representatives passed legislation to increase the minimum wage in the nation from $5.15 to $7.50. What are the pros and cons of this proposal? Provide an analysis based on the demand and supply of labor.
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