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If a monopolist has constant marginal cost MC =20 and faces demand p=80-Q, what is the effect on consumer surplus of a $5 per-unit tax on sellers? Is the tax revenue collected less than, equal to, or greater than the consumer surplus loss plus the reduction in profits?
Suppose the demand function for a profit maximizing monopolists good is P = 160 - 0.5Q, its total cost function is TC = 20 + 10Q + 0.3Q2, and its marginal cost function is MC = 10 + 0.6Q. If the firm uses a uniform pricing strategy, then rounded to t..
ABC corporation has the following activities that should generate book/tax differences in 2014: Purchased $100,000 of 5 year property. Straight-line depreciation is used for book purposes. Assuming a 25% federal tax rate, and a 6% state tax rate, how..
Discuss the differences between elasticity of supply and elasticity of demand answering the following equations:
In order for a price-discrimination scheme to be effective at boosting profit, the seller must...(choose correct answer(s))
The local city government has the offer of a gift. The donor wants to donate toward perpetual upkeep of the newly built park. If the upkeep cost is $25,000 per year and her gift as a long term investment can earn 8% annually,
Our recent recession seems to demonstrate again that expenditures and incomes depend on each other. If markets do not self-adjust, how can a decline in spending lead to a negative process that ruins an economy?
suppose there is a sudden and permanent decline in potential GDP. Describe the behavior of prices, output, interest rates, consumption, investment, and net exports.
Politicians are often heard saying that tuition at state universities should be kept low "to make education equally accessible to all residents of the state, regardless of income." Assuming that state funding for the universities is held constant; de..
In terms of influencing output, when the economy is operating at near full employment output relative to when the economy is operating at levels of output well below full employment. During the the Great Recession, the aggregate expenditure curve shi..
Long-run competition. Most of the cost of a new airplane is in the research and development and in building production facilities. By contrast, the marginal cost of producing another plane is relatively low. You have been hired by Boeing to recommend..
In general conclude which of the five competitive forces has the most significant impact on approach.
Suppose that a perfectly competitive industry is in long-run equilibrium and experiences an increase in production cost. Who will bear the burden of the increase? Is this fair?
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