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Overheard at the water cooler: "The demand and cost estimates that were provided at the meeting are very useful [Q - 90 - 6.5P and TC = 150 + 3.5Q]. Unfortunately what we didn't realize at the time was that our fixed costs were underestimated by at least 30 percent. This means that we'll have to adjust our price upward by at least 30 percent to cover the added fixed cost. In any case, there is no way in the world that we can survive by charging less than $9 for our product."
a. Comment on this statement. Do you agree with the speaker? Explain. Illustrate your answer with the use of a graph indicating the firm's short-run cost structure.
b. Illustrate what price do you think this firm should charge if it wants to maximize its short-run profit?
Someone proposes to buy the farm from you for $1 million. Would you make more by selling the farm or keeping it
What is output that should be produced to achieve economic efficiency and the value to society for correcting the externality.
Elucidate how do your previous answers change in the special case where money demand does not depend on the expected rate of inflation
Elucidate Congress is considering reinstating a 10% investment tax credit in order to stimulate the economy.
Elucidate however, are not sure of their own internal auditors at this point also the dual system in place.
Advertising is powerfull strategy to make people aware about company products and services and for this case is to emphasize reliability and low price, this effort will help the company to sustain in this area and to develop a customer franchise a..
Assume you have a production technology to can be characterized by a learning curve.
What kinds of people are most likely to have their utility reduced by such a law. Why do you think that the government requires such insurance.
Open a pizza restaurant and is considering either selling the bonds and using the 100,000 to start his restaurant or borrowing the 100,000 from a bank which would charge him an annual interest rate of 7 percent.
When and where did modern economic growth first happen. What are the major institutional factors that form the foundation for modern economic growth. What do they have in common.
The Performance by Patrice (PbP) Company purchased a Centaur Computer controlled manufacturing milling machine for $635,000 for use in its rear end manufacturing operations on November 8, 2007.
Tangents as a trigonometric function will be applied in our conversion of the Consumption Function in the Macro section of this course.
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