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A cable company is considering a new suburban market. The expected average fixed cost per home is $700. The monthly demand for residential cable in the city has been estimated to be given by q(p) ??180 ??2p , where q is expressed in thousands of households and p is the price (or charge) per month. The operator estimates a marginal cost of $20 per month per household.1) What is the quantity of households that would subscribe at a price of $0? 2) a. Without competition in the market, what price would this cable company charge per month?b. What is the price elasticity of demand at this price?c. In this case, how long would the cable company need to wait to cover fixed cost? (Hint: you need to think about how much the operator generates profits per month.)d. Over this period of time, how much consumer surplus would be generated? Required minimum-1 page
The economy is experiencing a contraction (recessionary gap) of $400 billion. What government spending stimulus would you recommend to move the economy back to full employment if the MPC is 0.75? Would your policy be any different if the MPC were ..
An industry consists of three firms with sales of $200,000, $500,000, $400,000. Compute the Herfindal-Hirschmann index (HHI)
Explain the difference between fixed-production technology and variable-production technology. Should the government set a goal of reducing the marginal social cost of pollution to zero in industries with fixed-production technology Should they d..
A company wants to prepare the demand curve for its product that it is selling. How would it get the information to prepare the schedule? How could a company prepare the demand curve for the new product that has not been seen by the public?
A television station is planning the sale of promotional DVDs. It can have DVDs manufactured by one of two suppliers. Supplier A will charge the station a set-up fees of $1,200 plus $2 for each DVD.
Recognize similarities and differences among common goods, public goods, private goods, and natural monopolies.
The long-run supply curve for a good is a horizontal line at a price $3 per unit of the good. The demand curve for the good is QD = 50-2P. then what is the equilibrium output of the good.
Suppose that virtually everyone in the United States decides to take life a little easier, and the length of the average workweek falls by 25%. How will that affect GDP Per capita GDP How will it affect economic welfare
You have been hired as a consultant by your mayor to evaluate the increase in aggregate demand in the city where you live. Describe to the mayor one (1) aggregate demand and supply factor that would have the greatest impact on the economy of your ..
Although "inflation is always and everywhere a monetary phenomenon," explain why: a. the start of a hyperinflation is typically related to the fiscal policy situation, and b. the end of a hyperinflation is usually related to changes in fiscal poli..
You need to hire some new employees to staff your start-up venture. You know that potential employees are distributed throughout the population as follows, but you can't distinguish among them: Employee Value Probability.What is the expected ..
A city that operates automobile parking facilities is evaluating a proposal to erect and operate a structure for parking in its downtown area. Three designs for a facility to be built on available sites have been identified as follows, where all d..
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