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Suppose that a paper mill "feeds " a downstream box mill. For the downstream mill, the marginal profitability of producing boxes declines with volume. For example, the first unit of boxes increases earnings by $10, the second $9, the third $8, and so on, until the tenth unit increases profit by just $1. The cost the upstream mill incurs for producing enough paper to make one unit of boxes is $3.50. a. if the two companies are separate profit centers, and the upstream paper mill sets a single transfer price (the price the box company pays the paper mill), what price will it set, and how much money will the company make b. if the paper mill were forced to transfer at marginal cost, how much money would the company make?
Diagramatic explanation of pareto optimality
In an effort to provide tax relief for households while still balancing the budget, Congress votes to raise business taxes and decrease personal taxes. explain the impact of these
Neo-classical synthesis is a synthesis of classical model and Keynesian model. In brief, it states that Keynesian model is correct in the short run whereas the classical analysis i
What impact will high and variable rates of inflation have on the economy? How will they influence the risk accompanying long-term contracts and related business decisions?
Let kids denote the number of children ever born to a woman, and let educ denote years of education for the woman. A simple model relating fertility to years of education is kids =
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Explain about the diminishing returns to an input. There are diminishing returns to an input while an increase within the quantity of which input, holding the levels of each of
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