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What factors would cause a firm to decide to buy intermediate products needed for production of its final goods or services? What are some of the benefits and disadvantages of deciding to make these products?
Price elasticity of demand for two customer segments
How do the concepts of accounting profit and economic profit differ? Why is economic profit smaller than accounting profit? What are the three basic sources of the economic profit? Classify each of following according to those sources:
Make a table showing the marginal cost of paper cup productions. What is the minimum price necessary for company to supply one thousand cups?
Marketing mix is controllable set of activities that the firm employs to respond to the wants of its target markets. Make a report on the marketing mix and keep the following questions in mind:
Compute output, marginal cost, average cost, price, and profit at the average cost-minimizing activity level. Compute these values at the profit-maximizing activity level.
Describe why some firms might suffer diseconomies of scale. Do you know any examples? Could GM be an example of diseconomies of scale?
Use demand and supply analysis to illustrate the changes in chicken prices described in the article. Describe what has happened in the corn and soybean-meal markets and how that has influenced the chicken market.
Briefly discuss whether this problem provides enough information to determine whether the equilibrium price and quantity of trucks increased or decreased.
Describe how the marginal product for a resource can change. Conclude with an explanation for what can change the demand for a resource.
Consider an electricity market with a daytime (peak-period) inverse demand of P=160-Q, and a nighttime (off-peak) inverse demand P=80-Q, where P is the price of electricity and Q is units of electricity.
Compute the weighted average cost of capital using book value weights. Compute the weighted average cost of capital using market value weights. Compare the answers obtained in parts a and b. Describe the differences.
Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.
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