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The Pear Computer Company just developed a totally revolutionary new personal computer. It estimates that it will take competitors at least two years to produce equivalent products. The demand function for the computer is estimated to beP = 2,500 - 0.0005Q
The marginal (and average variable) cost of producing the computer is $900.
a. Compute the profit-maximizing price and output levels assuming Pear acts as a monopolist for its product.
b. Determine the total contribution to profits and fixed costs from the solution generated in Part (a). Pear Computer is considering an alternative pricing strategy of price skimming. It plans to set the following schedule of prices over the coming two year
c. Calculate the contribution to profit and overhead for each of the 10 time periods and prices.
d. Compare your results in Part (c) with your answers in Part (b).
e. Explain the major advantages and disadvantages of price skimming as a pricing strategy
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Suppose you have been recently employed as manager of a restaurant and a very important credit card firm offers you a deal that is supposed to raise your sales.
Which is not true about the controlled economy? A. basic economic questions are answered by by the government b. private property is limited or restricted c. public services are free d. consumers basic needs and wants can be ignored e. individuals ..
How can your company profitably exploit this difference?
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In the town of Woodland, California, there are many dentists but only one eye doctor. The market demand curve for eye exams is P = 115 - 2Q, marginal revenue is MR = 115 - 4Q and the marginal cost for an eye exam is constantly $35.
TOTAL CIVILIAN POPULATION AGE 16 AND OLDER: 233.8 million NOT IN LABOR FORCE: 79.5 million CIVILIAN FORCE TOTAL: 154.3 million - EMPLOYED: 145.4 million - UNEMPLOYED: 8.9 million CIVILIAN UNEMPLOYMENT RATE: 5.8%
what is the effective corporate tax rate?
Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function: P = 600 - Q^c -Q^d where Q^c and Q^d are the quantities sold by the respective firms
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Commercial Recording, Inc., is a manufacturer and distributor of reel-to-reel recording decks for commercial recording studios. Revenue and cost relations are: TR = $3,000Q - $0.5Q2 MR = $3,000 - $1Q TC = $100,000 + $1,500Q + $0.1Q2 MC = $1,500 + ..
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