Explain how does the marginal price for a product like

Reference no: EM1327634

Economics:Demand curve,accounting profit etc.

Problem 1

The following is a demand schedule for shoes:
Price: $100 $80 $60 $40 $20
Quantity: 10 14 18 22 26
a. Illustrate the demand curve.
b. How much will consumers spend on shoes at a price of $80?
c. As price drops from $100 to $80, is the demand elastic or inelastic? Show your work or reasoning.

Problem 2

Advertisers convince people that to be stylish they need twice as many shoes.
a. Redraw the demand curve.
b. How much will consumers now spend on shoes at a price of $80?
c. As price drops from $100 to $80, how does elasticity change as opposed to problem 1? Why?

Problem 3

How large of a tax-induced price increase would it take to reduce cigarette consumption by 20 percent? Show your work.

Problem 4

Identify three goods each for which your demand is (a) elastic and (b) inelastic. What accounts for the difference of elasticity? Explain thoroughly.

Problem 5

Complete the following table. What is the value of fixed cost?
Rate of Output Total Cost Marginal Cost Average Total Cost
0 $100
1 110
2 130
3 165
4 220
5 300

Problem 6

On a graph, depict marginal cost and average total cost using the data from problem 5. Indicate minimum average total cost on the graph.

Problem 7

Suppose a company incurs the following costs:
Labor $400
Equipment $300
Materials $100
It owns the building so it doesn't have to pay the $800 in rent.
a. What is the total accounting cost?
b. What is the total economic cost?
c. Explain why these are different in this way.

Problem 8

Consider the marginal cost for a product like Windows XP. How does the marginal cost for a product like this differ from a product like automobiles? What relevance might there be to this difference?

Reference no: EM1327634

Questions Cloud

Find the critical issue(s) confronting wcc north america : What is the critical issue(s) confronting WCC North America.

Computing future values in given case : Chuck Tomkovick is planning to spent $25,000 today in mutual fund that will offer a return of eight percent each year. What will be the value of investment in ten years?

Specifying the termination of an employment relationship : He tells Paula that he will continue to employ her as his secretary if he passes the exam. If he fails the exam, the employment relationship has been terminated in what way?

Distinguishing leadership from management : How can we distinguish leadership from management? What does each contribute to accomplishment of goals?

Explain how does the marginal price for a product like : Explain how does the marginal price for a product like this differ from a product like automobiles. What relevance might there be to this difference.

Design for developing web applications : Computer: Which of the following is designed for developing Web applications - Which of the subsequent is designed for developing Web applications

Explain e-business asists- describe the many marketing tools : Explain E-Business Asists- Describe the various marketing tools used on Citibank and European Central Bank

How important is it to keep the site current : How important is it to keep the site current.According to "Putting Business Online Isn't Always Easy" (2005), "the biggest mistake people make is failing to know the commitment a Web site demands."

Time value of money using given scenario : You get same prize but the choice changes to $5,000 now or $5,500 in three years. What do you do? Describe the time value of money using this scenario as an example.

User Account

All Pages