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Suppose that, prior to other firms entering the market, the maker of a new smartphone (Way Cool, Inc.) earns $85 million per year. By reducing its price by 50 percent, Way Cool could discourage entry into "its" market, but doing so would cause its profits to sink to -$6 million. By pricing such that other firms would be able to enter the market, Way Cool's profits would drop to $35 million for the indefinite future.
In light of these estimates, do you think it is profitable for Way Cool to engage in limit pricing?
Elucidate why the MP/P relation is deficient as the sole mechanism for determining the optimal level of resource.
Explain how turmoil in global financial markets might affect the demand for loanable funds, investment, and global economic growth in the future and how do the high saving rates in Asia impact investment in other countries?
Assume that the United States economy is in long-run equilibrium with an expected inflation rate of 4 percent and an unemployment rate of 6 percent. The nominal interest rate is 9 percent. Using a correctly labeled graph with both the short-run and..
If the cost of a substitute product increases, which of the following is most likely to happen in the market for the product under consideration in the short run.
Changing preferences can also affect changes in land use. In the United States, the proportion of the population in the 65-and-older age bracket is growing. What effects might this have on the location and nature of the residential housing stock?
Federal budget and relate it to standards of living in an exploration of fiscal policy. You are asked to post and defend your view on whether fiscal policy should be expansionary, contractionary, or neutral right now.
In the short run a firms total cost of producing the hundreth unit of output equals $10,000. If it produces one more unit its total costs will be $10,150. whats the marginal and average total cost of the 101st unit and whats the average total of 100 ..
1). The DeBeers company is a profit-maximizing monopolist that exercises monopoly power in the distribution of diamonds. If the company earns positive economic profits this year, the price of diamonds will:
A monopolist encounters the following demand curve: P=120-0.02Q-What is the level of production, price and total profits per week?
Assume that economy starts at equilibrium and the mpc = 0.75. Find the effect of a $300 increase in government spending once all the rounds of multiplier process are complete?
A quote from the Earth Policy Institute summed up air pollution from vehicles this way, "while only some motorists contribute to traffic fatalities, all motorists contribute to air pollution fatalities."
In 1990s, Chrysler Company placed nearly all decisions about the development of a new vehicle in the hands of a single, cross functional product team.
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