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16 You are the manager of a firm that manufactures front and rear windshields for the automobile industry. Due to economies of scale in the industry, entry by new firms is not profitable. Toyota has asked your company and your only rival to simultaneously submit a price quote for supplying 100,000 front and rear windshields for its new Highlander. If both you and your rival submit a low price, each firm supplies 50,000 front and rear windshields and earns a zero profit. If one firm quotes a low price and the other a high price, the low-price firm supplies 100,000 front and rear windshields and earns a profit of $9 million and the high-price firm supplies no windshields and loses $1 million. If both firms quote a high price, each firm supplies 50,000 front and rear windshields and earns a $7 million profit. Determine your optimal pricing strategy if you and your rival believe that the new Highlander is a "special edition" that will be sold for only one year. Would your answer differ if you and your rival were required to resubmit price quotes year after year and if, in any given year, there was a 50 percent chance that Toyota would discontinue the Highlander? Explain.
Identify three roles for money: money is a unit of account, a store of value also acts as a medium of exchange.
Assume the farmer buys insurance that pays 3$ if it doesn't rain but costs 2$. Illustrate what is their consumption when it rains.
What is the rate of inflation of the U.S. dollar is 5% and the rate of inflation of the Japanese yen is 2%. What is the percent change in the real $/Y exchange rate.
Some of the largest import tariffs tax on imported goods is on shoes. Strangely, the cheaper the shoes, the higher the tariff.
Suppose that you are in a committee meeting of the United Nations
Find out the equilibrium level of GDP. Next find the multiplier for government purchases and fixed taxes. If full employment comes at y+1800, what are some policies that would move GDP to that level.
Assume which Sweden also Portugal both produce oil also stained glass. Sweden's opportunity cost of producing a pane of stained glass is 8 barrels of oil.
Consider what you have learned about the root causes, as identified by leading economic thinkers and policymakers.
Omar's marginal utility for cups of coffee is constant at 1.5 utils every cup no matter elucidate how many cups he drinks.
illustrate what cost-minimizing combination of K and L will the manufacturer employ for the output levels in part a.
Illustrate what would you recommend that the firm do given this resource combination.
Explain the solution to the firm's cost-minimization difficulty ever occur off the iso-quant representing the required level of output.
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