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John Bros, owner of a spark plug manufacturing facility, is looking to expand his production capacity. He is considering three locations A, B, and C for the constructing of a new plant. The company wishes to find the most economical location for an expected volume of 2500 units per year. Bros calculates that the fixed costs per year at each of the sites amount to $25,000; $50,000; and $100,000 respectively. The variable cost is $70 per unit, $40 per unit and $20 per unit respectively. The expecting selling price for each spark plug is $120. Find the preference volume for each location.
Describe why the demand curve facing a monopolist is less elastic than one facing a firm that operates in a monopolistically competitive market.
Show the results of a Fiscal Policy action that will bring this economy to full employment level of Real GDP. Explain the effect on the fiscal budget and show the effect on the Money Market and the Investment Market.
Assume x and y are the only two goods a person consumes. If after a rise in p x , the quantity demanded of y decreases, one could say
This solution will focus on the negative impacts of NAFTA from two main fronts: the negative impact on trade and negative impact on employment.
Fastly Delivery Corporation has two divisions.
What are the equilibrium quantity and price? How much consumer surplus exists in this market? If a $2 excise tax is levied on this good, what will happen to the equiilibruim price and quantity? What will the consumer surplus be after the tax?
The consumption taxes the government collects in a given period are not restricted to be levied on consumption from only in that period.
Assume you are the manager of Abba Cable Company, which provides commercial communication services to the town of Canyon Lake, Texas. Because of licensing restrictions in the market, only your company and two others (Babba and Cabba) are allowed t..
Why would the simple Keynesian consumption function predict that this strategy would work and the nominal interest rate cannot fall below zero. What might the Fed do to try to achieve the optimal real interest rate you calculate in Part b?
Solve for the elasticity of demand as a function of the market price. Draw this function for P [1/3, 2/3]. Suppose a (small) sales tax is imposed on potatoes. Would the burden of the tax fall mostly on consumers, mostly on producers, approximate..
Elucidate what are some measures of total ouput on the horizontal axis of the AS/AD model. Which measure do you think represents the most accurate picture of the output of an economy.
At the start of the game, A will decide how much to spend on advertising. B, after learning how much A has spent, can then either match A's advertising expenditure or spend nothing on advertising.
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