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Airline Pricing. Consider an airline that initially has a single price of $300 for all consumers. At this price, it has 120 business travelers and 80 tourists. The airline s marginal cost is $100. The slope of the business demand curve is $2 per traveler, and the slope of the tourist demand curve is $1 per traveler. Does the singleprice policy maximize the airline s profit? If not, how should it change its prices?
Suppose that they are thinking of each specializing completely in the area in which they have a comparative advantage, and then trading at a rate of 2.5 pounds of potatoes for 1 chicken, would they each be better off
A market contains a group of identical price-taking firms. Each firm has a marginal cost curve MC(Q) = 2Q, where Q is the annual output of each firm. A study reveals that each firm will produce if the price exceeds $20 per unit and will shut down.
Suppose that the CAPM is a good model of risk in the stock market. Suppose also that the average excess return on stocks is 10% and that the risk free interest rate is 1%. What would you expect to be the return to stocks with each of the following..
a. Warner is selling in a perfectly competitive market at a price of $40. What is the profit maximizing or loss-minimizing output b. Calculate the firm's profit or loss. Show computation. c. Should the firm continue to produce in the short run
Suppose that some variable is growing at constant rate. a. Prove that the natural logarithm of that variable is a linea r function of time. b. Find the intercept and slope of the linear function in part a.
Office building maintenance plans call for the stripping, waxing, and buffing of ceramic floor tiles. This work is contracted out to maintenance firms, and both technology and labor requirements are very basic. Supply and demand conditions in this..
Austin Utilities is planning to install solar panels to provide some of the electricity for its groundwater desalting plant. The project would be done in two phases. The first phase will cost $4 million in year 1 and $5million in year 2.
Norway has a long coast that borders on the north Atlantic, making it relatively more productive in fishing. Sweden has a greater endowment of capital, making it relatively more productive in automobiles.
Arc income elasticity Deluxe Carpeting a leading manufacturer of carpeting sold 28 million square yards of carpeting at a price of $16 per yard. This year, GNP per capita is expected to fall from $19,000 to $17,000 as the nation enters a recession..
In the model of monopolistic competition, we say that there is product differentiation. What does this mean, and how does it differ from the assumption of homogeneous goods in perfect competition?
whether she is better off or worse off than she was in Year 1
online educators oe a not-for-profit firm exempt from taxes is considering replacement of some electronic equipment
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