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A firm charges its customers $20/unit for the first unit purchased and $10 for each additional unit in excess of one unit. Suppose the firm’s marginal cost is fixed at $5.
a. How many units will this firm sell?
b. Find the profits earned from the price strategy.
Two hospitals want to merge. The price elasticity of demand is 0.20, and each clinic has fixed costs of $100,000. One clinic has a volume of 9,200, marginal costs of $70, and a market share of 3 percent. What are the total costs, revenues, and profit..
When Commonwealth Edison (electric utility) needs more revenues, it petitions the Illinois Commerce Commission to allow it to raise its rates. What does this tell you about the type of price elasticity of demand within this price region for Common..
Explain the concept of mark-to-funding accounting rule, proposed by Brunnermeier Et.al.(2009) ? How can this rule help reduce the problem caused by the mark-to-market rule ?
Suppose the U.S. economy is in a recession and faces relatively high inflation. List only the monetary policy approaches the Fed could take to resolve these two problems (i.e, do not list the policy tools—just describe in general what the Fed could d..
According to the empirical evidence of La Porta and colleagues, which system appears to be more efficient? list one weakness with this evidence. Assuming that one system is more efficient than the other, why might a country that uses the less efficie..
Tight (contractionary) money policy
The article touches on two crucial conditions for a fiscal stimulus to work.
Calculate the value of the market basket for each year given the price in the table blow. also calculate the price index for 2014 and the inflation rate for 2014. assume that the market basket consists of 150 container of yogurt 300 cups of coffee an..
A profit maximizing monopolist hires workers in a perfectly competitive labor market. Employing the last worker increased the firm’s total weekly output from 110 units to 111 units and caused the firm’s weekly revenues to rise from $25,000 to $25,750..
How could South Koreas long run rate growth of real GDP per capita shrink to or below zero if it's long term rate of total real GDP growth were to drop to nearly zero? (Hint: what is the difference between the rate of the economic growth rate and the..
q.1. briefly discuss the impact of rational self-interest on each of the following decisionsa. whether to attend
What is the equal-payment series for 10 years that is equivalent to a payment series starting with $15,000 at the end of the first year and decreasing by $3,000 each year over 10 years? Interest is 9% compounded annually.
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