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Always Round Tire finds that their demand curve is P = 50 - .02 Q (note: Marginal Revenue has twice the slope as the demand curve). What price and quantity combination will maximize the firm's revenue? What are the total revenue and price elasticity at this point?
Agricultural price supports increase consumer surplus. Agricultural price supports decrease producer surplus. Agricultural price supports benefit taxpayers by reducing the price of food.
A corporation is considering spending $3 million for a new stamping press which will save $550,000 per year (repairs, downtime, etc.) over its 7-year life. At the end of seven years, the machine could be sold for $1.8 million. An alternative is to sp..
In order to create an effective incentive compensation scheme, you must have. Principal-agent problems: Principal-agent relationships:
Suppose a government moves to reduce a budget deficit. Using the model developed in class: a) Graphically illustrate the impact of reducing the government’s budget deficit by increasing (lumpsum) taxes on household income. Be sure to label: i. the ax..
Calculate equilibrium level of income in goods market if i=10 also calculate equilibrium level of income in money market if i=10.
Which leads to higher interest rates, which leads to higher output? Which leads to higher inflation? Which represents a more hawkish Fed? Which represents a more dovish Fed?
Illustrate if the company has the cash necessary for the installation would you recommend the change. Illustrate if the company has to float 5,000,000php worth of noncallable bonds at 15%.
Other things remaining the same, if the price level rises, then domestic interest rates will:
Compared with perfect competition, quantity produced in monopolistic competition is inefficient as price is higher than marginal cost (i.e. allocative inefficiency). Why do some economists argue that even if price is higher than marginal cost, it doe..
Suppose as a manager of a profitable department store you are confronted with a pricing problem. You have two types of customers: a high-end type that are willing to pay a price of $25 for a pair of Levis Jeans, and a low-end type customer that are w..
The initial cost of a pickup truck is $11289 and will have a salvage value of $3730 after five years. Maintenance is estimated to be a uniform gradient amount of $133 per year, with zero dollar for first year maintenance. The operation cost is estima..
Suppose a monopolistic competitor in long-run equilibrium has a constant marginal cost of $6 and faces the demand curve given in the following table: What will be the monopolistic competitor’s average fixed cost at the output it chooses? Why is the l..
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