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If we assume that all firms in a perfectly competitive constant cost industry are identical, we conclude that, in the long run, product price will exactly equal the firms' minimum average total cost. Explain why this is true using supply and demand curves. For example, say that demand for a product falls due to changing consumer tastes, while the cost curves of the firms are unchanged. Describe what happens using supply and demand curves. In the long run, does the market price change due to the shift in the demand curve? Why or why not?
Elucidate why and the benefits/drawbacks of this strategy. Describe each tool and how it is used to achieve it desired effect on the US money supply.
The World Bank is currently advising newly industrialized nations on how to increase growth and they have asked for your help.
Suppose a single parent can work up to 16 hours per day at a wage rate of $10.00 per hour. Various income maintenance programs have been developed to assure a minimum level of income for low-income families, such as Aid to Families with Dependent ..
The Rusty Anchor Bar has two-types of patrons: legal and underage drinkers. Even though it is illegal to allow entry to underage drinkers, there is no perfect way to identify underage drinkers since they often use fake identification card.
Suppose Acme decides that instead of cutting the wholesale price of the CD players it will offer a $50 rebate to the consumer (that is, the wholesale price is $200.
Suppose an economy characterized by the following equations; Assume W=10,000. Draw the aggerate expenditure function on a scale diagram along the 45 degree line.
Discuss the reason why governments might want to intervene and how they might do- with respect to the following "problem" in the functioning of an otherwise perfectly-competitive ("pareto-efficient") economy:
What is the business cycle and how is it linked to a secular trend? Describe each of the four phases of the business cycle and indicate how they a linked to the concepts of a "boom", a "recession" and an "expansion".
Two identical firms face linear demand. Market demand is given by P=30-Q. Compare graphically consumer and producer surplus in Cournot and Stakelberg equilibria to perfect competition.
During late December 2008 Company A acquires a small competitor, Company B. During the evaluation of the acquisition it is determined that the customer lists of Company B have a fair value of $50,000. Company A has spent $15,000 during the year up..
The rate of return on common stock (Ke) is 13 percent. The industry has a constant growth rate (g) of 7 percent. Calculate the current price of the stock.
The demand for polished bronze is given by P = 100 - Q/2. Production of polished bronze is controlled by Bronze Indentify BIs profit maximizing output and price. What is the cost to the town of removing the mercury pollution?
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