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Alchem (L) is the price leader in the polyglue market. All four other manufacturers [follower(F) firms] sell polyglue at the same price as Alchem. Alchem allows the other firms to sell as much as they wish at the established price and supplies the remainder of the demand itself. Total demand for polyglue is given by the following function QT = QL + QF P = 3000 - 3QT Alchem's marginal cost function for manufacturing and selling polyglue is: MCL = 300 + 2.5QL The aggregate marginal cost function for the other manufacturers of polyglue is: ?MCF = 200 + 2QF (a) In order to maximise profits, how much polyglue should Alchem produce and what price should they charge? (b) What is the total market demand for polyglue at the price established by Alchem in part (a)? How much of total demand do the follower firms supply?
A ‘linear deprecation' is characterized by a loss in value by constant amounts per year. Why might calculated depreciation rates not reflect ‘true' depreciation.
Why the long-run aggregate-supply curve is vertical. Three theories for why the short-run aggregate-supply curve is upward-sloping.
How do fixed costs play a role in your analysis? What is the difference between shutting down and going out of business?
Twenty-five years ago, coffee was a commodity product. Coffee brands such as Maxwell House (“good to the last drop”) and Folger’s advertised on television, but the difference between the brands was minimal.
Wilderness Adventures has earnings per share of $2.45 and dividends per share of $1.05. The total equity of the firm is $850,000. There are 40000n shares of stocks outstanding. What is the sustainable rate of growth?
With current technology, suppose a firm is producing 800 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 5 units of land, 4 units of capital, and 1 unit of entrepre..
q1. a consumer has 400 to spend on goods x and y. the market prices of these two goods are px 10 and py 40. what is
Suppose that Ben has $90 to spend on two goods, movie (M) and hamburger (H). The price of a movie is $10 and the price of a hamburger is $2. Ben’s preferences are represented by the utility function: U(M, H) = M *H^2. What is Ben’s optimal choice bet..
Suppose the following were facts relating years of education to average annual income of individuals. Would you use the inductive or deductive method to derive an economic principle from these facts.
The demand curve and supply curve for one-year discount bonds with a face value of $1,000 are represented by the following equations: Bd : Price = -0.6 Quantity + 1140 Bs : Price = Quantity + 700 Suppose that, as a result of monetary policy actions, ..
The presence or even the threat of prize freezes (i.e. price controls) may induce firms to integrate vertically (to merge with “upstream” supplier firms or with “downstream” customer firms). Explain why.
A firm manufactures a product that it sells for $100. It sells 1000 units per week. What is its total revenue? It costs the firm $80 to produce a unit. At its current short-run level of production, a firm’s average variable costs equal $20, and its a..
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