How much output would a perfectly competitive industry

Assignment Help Managerial Economics
Reference no: EM1394900

Question 1

Many business people have not had the good fortune to be able to take an Economics course, and have never heard of the demand curve, marginal revenue curve, marginal cost curve, elasticity and similar concepts. Nevertheless, they are very successful.

In your view, can managers disregard economic principles? If not, what practical (informal) approximations to the economic concepts do they use when determining the price they charge?

Question 2

The market demand for steel is described by Q = 100 - P, where Q is the quantity of output and P is the price per unit of output. The marginal private cost of producing steel (i.e. the cost recorded in the steel companies' accounting) is MCPRIVATE = 6Q. The steel producing firms pollute a river, and the marginal cost downstream users incur for cleaning the water is MCEXTERNAL = 3Q.

a) How much output would a perfectly competitive industry produce in the absence of emission fees (effluent charges) and in the absence of the requirement to buy pollution permits?

b) What is the socially optimal output of steel, taking into consideration the social (not just private) cost of steel production?

c) Suppose an entrepreneur takes over all firms in the industry and manages them as a single organization (a monopoly). How much steel does a profit-maximizing monopoly produce in the absence of emission fees (effluent charges) and in the absence of the requirement to buy pollution permits?

d) Assume the government imposes a pollution tax on the monopoly equal to the magnitude of the externality (i.e. equal to the cost downstream users incur for cleaning the water). How much steel does a profit-maximizing monopoly produce now?

Question 3

"The social responsibility of business is to increase its profits". Discuss.

Question 4

You have been hired as an economic advisor to a foreign-exchange trading firm. What buy or sell recommendations for the Canadian dollar would you make in response to each of the following news, considered separately (a one-sentence comment in each case would be sufficient):

a) Faster economic growth in the European Union;
b) Expectations of higher interest rates in Canada;
c) Canadian interest rates rise, but less than expected;
d) Expected loosening of Canadian monetary policy;
e) Higher inflationary predictions for Canada.

Question 5

Declines in stock prices are sometimes viewed as an indicator of future declines in real GDP. Explain why

Reference no: EM1394900

Questions Cloud

Factorial experiments : Can you determine the number of levels used for each factor? Explain. Describe a treatment for this experiment and determine the number of treatments used.
What is the percentage of oxalic acid in the sample : Using A sample having X amount of oxalic acid. If 0.5187 grams of the sample requires 40.20 mL of 0.1000 M Sodium hydroxide to neutralize the oxalic acid completely.
English paper- correct grammar : writting a paper on describe the view of what i seen of nature when, i walked outside. I had to Consider using my five senses: see, smell, touch, taste, hear.Can someone correct my grammar, and make my paper flow better, and give it a good conclus..
Reliability requirement based on obtaining successful tests : A demonstration to verify that an item meets its reliability requirement is based on obtaining 5 successful tests. If the probability of a successful test is 0.9, find the probability that 10 tests will be required to pass the demonstration.
How much output would a perfectly competitive industry : What is the socially optimal output of steel, taking into consideration the social (not just private) cost of steel production and how much output would a perfectly competitive industry produce in the absence of emission fees
Randomized block experiment : A design for 2 treatments has p pairs of blocks. Each block has three plots. In each pair one block has two plots with A and one with B, and the other has two plots with B and a single plot with A.
Explain why it takes longer time when anyone cook an egg : Explain why it takes longer time when anyone cook an egg in boiling water while camping at in elevation of 0.5km in the mountain than it does it home.
Why numerous people are resistant to change in workplace : Although life is dynamic and people go through major and minor changes approx daily, numerous people are resistant to change. This is especially true in workplace.
Magnitude of standard error related to value of correlation : In general how is the magnitude of the standard error of estimate related to the value of correlation?

Reviews

Write a Review

 

Managerial Economics Questions & Answers

  Question about profit maximization

A New Hampshire resort offers year-round activities: in winter, skiing and other cold-weather activities; in the golf, tennis, summer, and hiking.

  Compute the required rate of return on a stock

Compute the required rate of return on a stock that has a beta of 2, if the risk-free rate is 4% and the market rate of return is 12 percent.

  Compute expected rate of return and standard deviation

You are planning a security with the following possible rates of return, Compute the expected rate of return and the standard deviation of the returns.

  Increase demand of labor

Discuss and explain two factors that would increase demand for labor. Suppose if the market price of the good or service that a firm produces increases, what happen to the demand of labor

  Define subsidy

Mr. Smith, has fallen behind on his work, he has asked you to help to make a letter for a local business or economic project.

  Finding the product cost

Wakefield, Corporation, offers a CPA review course in cities throughout the eastern US. Wakefield emplayes local CPAs to do teaching. Every instructor is paid 120 dollar an hour to teach course;

  Demand, supply and the market equilibrium

The article study for the demand, supply and the market equilibrium has been discussed. The article that has been review was published on August 2012.

  Calculate labor productivity

An Appliance Service firm made home calls and repaired ten lawn movers, two refrigerators, and three washers in an 8-hour day with his standard crew of 3 workers.

  Questions about risk & variance

Solving Question about Risk & Variance, a statistical measure of the degree to which securities' returns move together is called,

  Solving problems on market efficiency

Four firms are in fast increasing sectors. Each has a constant price to earnings ratio (P/E). Each firm is about to publicize new products that could boost companies earning per share.

  Determine total cost function

Kathy Bakery is a local full service bakery in Omaha, Nebraska. Kathy sells loaves of wheat bread for $3 a loaf.

  Marginal cost approach to decision making

Continental Airlines was doing something that seemed like a horrible mistake. All other airlines at the time were following a simple rule: They would only offer a flight if, on average,

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd