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In the late 1990s, car leasing was very popular in the United States. A customer would lease a car from the manufacturer for a set term, usually two years, and then have the option of keeping the car. If the customer decided to keep the car, the customer would pay a price to the manufacturer, the “residual value,” computed as 60% of the new car price. The manufacturer would then sell the returned cars at auction. In 1999, the manufacturer lost an average of $480 on each returned car (the auction price was, on average, $480 less than the residual value).
A. Why was the manufacturer losing money on this program?
B. What should the manufacturer do to stop losing money?
Suppose there is a surge in demand for olive oil after researchers discover that olive oil consumption reduces heart disease. Analyze the short and long run effects of this increased demand on you firm.
a.)define the concept of economic models b.)define scarcity and choices and their relationship in the study of economics c.) why do economists disagree d.) Name and define economic resources or factors of production
assume you are a policy maker in washington dc. lobbyists for the preschoolers of america h e put pressure on their
Suppose that you are an officer of your campus theatre club. You are at a meeting called to discuss ticket prices. One member says, "What I hate to see most of all is empt seats in the theatre. We sell out every weekend performance; however there are..
Always Round Tire has a production function of Q = 300 L.75 K.5. In the short run, if L = 250 and K = 25, what happens to the output of tires if L jumps to 300 and then 350. What law does this illustrate?
Describe the revenue, costs, and profit that Starbucks expected when it entered this market.
The net cash flows from an investment project are -$30,000 in the first year, -$20,000 in the second year, -$6,000 in the third year, $1,500 in the fourth year, $5,000 in the fifth year, $15,500 in the sixth year, and $66,000 in the 7th year. Calcula..
Construct a “trigger” strategy that can support the collusive outcome; Find the values for the interest rate r such that the “trigger” strategy is
in your quest to understand how your employees would be affected by any of the decisions you are going to make you also
In the last month, the price of gasoline increased by 20 percent. Your job is to determine what caused the increase in price: a change in demand or a change in supply. Ms. Info has all the numbers associated with the gasoline market.
a political columnist wrote the following today the main purpose of governments issuing bonds is to let craven
The cost for operating a commercial truck is kn, where k is a constant of proportionally, v is velocity in miles per hours and n is the trip length in miles. It is estimated that at 85 mph, the average cost of operation is $52 per mile.
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