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Alex Cohen is the general manager of the textile division in a large diversified company. Recently, Alex argued strongly to the CEO that an expansion request by the drug division be approved. On the surface, Alex's actions seem strange, given that Alex is not affected by this decision (it does not affect his budget or his compensation). Further, Alex spent substantial time developing his presentation for the CEO.
a. Why do you think Alex took such an active role in supporting the drug division's request?
b. Since Alex is not affected by the decision, should the CEO consider Alex as an unbiased observer who is focused on trying to maximize company value? Explain.
What is the price of the car if the interest rate is 12% per year compounded monthly - what would be the equivalent uniform monthly payment?
Two local ready mix cement manufacturers, Here and There, have combined demand given through Q = 105 - P. Their total expenses are given by TC = 5Q + 0.5Q2 and TC = 5Q + 0.5Q2.
Propose two (2) applications of the knowledge that you have learned in this course to your current or a future position. Provide a rationale for your response.
What is the labor-intensive good and what is the Marginal Rate of Transformation impact?
They result in wealth transfers from the franchiser, who paid for these termination provisions in terms of lower franchise fees, to the franchisee.
Assume the market price of sugar is twenty-two cents per pound. If a sugar farmer produces 100,000 pounds, the marginal cost of sugar is 30 cents per pound.
Suppose that Dexter and Amy live in a community that is trying to determine how much of the public good should be produced.The marginal cost of producing the public good is constant at $2. What is the community's willingness to pay for the 24th unit ..
Based on predatory pricing theory, the predatory company sets price below marginal cost, the relevant cost of production. Competitors must then lower their prices below marginal cost,
What is meant by the steady state economic growth path ? What determines its slope?
question 1 many business people have not had the good fortune to be able to take an economics course and have never
From the scenario, determine to the importance of predicting the pricing strategies of rival firms in an industry characterized by mutual interdependence. Provide a rationale for your response. Examine the common price setting strategies of airlines ..
1. What effects will the following have on the equilibrium rate of interest? (You should consider which way the demand and supply curves of money shift.)(a) Banks find that they have a higher liquidity ratio than they need.(b) A rise in incomes.(c) A..
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