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Maximizing the Profit Margin? According to the marginal principle, the firm should choose the quantity of output at which price equals marginal cost. A tempting alternative is to maximize the firm s profit margin, defined as the difference between price and short-run average total cost. Use the firm s short-run cost curves to evaluate this approach. Draw the firm s short-run supply curve and compare it to the supply curve of a firm that maximizes its profit.
Where Q measures the number of units of the public good and P is the price in dollars. The marginal cost of providing the public good is $180. a) What is the economically efficient level of production (Q*) of the good? b) Illustrate your answer on ..
This question considers a closed economy Keynesian model that is augmented to include transfers payments to consumers (Tr = Transfers) that increase consumers' disposable incomes and lower government savings.Derive and calculate the Keynesian mult..
A delivery company is considering adding another vehicle to its delivery fleet, all the vehicles of which are rented for $100 per day. Assume that the additional vehicle would be capable of delivering 1500 packages per day.
Assume that a "leader country" has real GDP per capita of $40,000, whereas a "follower country" has real GDP per capita of $20,000. Next suppose that the growth of real GDP per capita falls to zero percent in the leader country and rises to 2 perc..
Explain what would happen to the firm's initial cost curves if the plan instead requires this firm to provide a $100,000 group program that covers all of its employees, regardless of the number of employees
You need to hire some new employees to staff your start-up venture. You know that potential employees are distributed throughout the population as follows, but you can't distinguish among them: Employee Value Probability What is the expected v..
As a manager of MyShoo Inc., you have estimated that the daily demand for shoes that your firm faces is Q=325-3P-0.01 I, where P is the price of a pair of MyShoo shoes and I is the average consumer income of the firm's customers.
Let X denote the number of rainy days on the coming weekend. Suppose that there is a 20% chance of rain on Saturday and 50% chance of rain on Sunday. Assume that rain on Saturday and rain on Sunday are independent events, so that Prob(rain on Satu..
Consider the log-linear model 0 1 1 2 2 ln(Y) β0+ β1X1+ β2X2 + u Suppose you think that the value of β2 (the effect of X2) was not constant, but rather increased when X1 increased.
Can you "beat the market" with public information? That is, can you use publicly available information to help you buy something cheap and quickly sell it at a higher price? Why or why not?
Suppose a man receives an initial annual salary of BD 30,000, increasing at the rate of BD 2500 a year. If money is worth 10%, determine his equivalent uniform salary for a period of 8 years.
Assume that Hong Kong and Taiwan can supply computers to Ecador at a per-unit price of $300 and $500, respectively. With free trade, how many coputers does Ecuador import From which nation does it import
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