Questions related to marginal cost analysis

Assignment Help Macroeconomics
Reference no: EM1370481

1) The average variable cost is AVC = 3500 - 6Q + 0.005Q2

a. If the industry is competitive, estimate the shut down price.
b. If the market price is below the shut down price, regardless of fixed cost, explain why the firm should shut down.
c. Using this information, draw the firm's short run supply function.

2) The price elasticity of demand for a textbook sold in the United States is estimated to be -2.0, whereas the price elasticity of demand for books sold in overseas markets is -3.0. The U.S. market requires hardcover books with a marginal cost of $24.00 while the overseas market is normally served with soft-cover texts having a marginal cost of only $18.00. Calculate the profit maximizing price in each market. How might these prices become equal?

 

Reference no: EM1370481

Questions Cloud

Analyze algorithm to determine length of longest substring : Explain and analyze the algorithm to determine the length of longest substring that appears both forward and backward in an input string T[1 . n].
Determining cournot duopoly and pricing strategy : Assume that in the perfectly competitive industry the equilibrium industry quantity is 10,000 units. Assume that the monopoly output is 5,000. For a 2-firm Cournot Oligopoly (N =2) known as a duopoly, what is the likely Cournot QUANTITY for the in..
Explain how does the organization employ the internet : Explain How does the organization employ the Internet and other recent (and emerging) technologies in its product or service offerings/development and marketing efforts?
Compute probability distribution and conditional probability : Write down solution this question in cryptographic. Assume encryption function is defined compute probability distribution and conditional probability distribution.
Questions related to marginal cost analysis : The price elasticity of demand for a textbook sold in the US is estimated to be -2.0, whereas price elasticity of demand for books sold in overseas markets is -3.0.
Characteristics of monopolistic competitive firm : The companies in the detergent market closely fit the mold of the monopolistic competitive firm. Research the company in this market and describe how it fits some of the characteristics of the monopolistic competitive firm.
Example on business meeting protocol : It is less evident when the meeting is being run by a strong personality but nonetheless degradation in discipline is still displayed
Explain how would you explain to them the reasons : Explain How would you explain to them the reasons for and concepts behind probability and impact and How would you explain the necessity for these steps?
Determining price fixing : Price fixing is a per se violation of Clayton Antitrust Act. From the materials in library and the Internet, find out an example of the price fixing case or other violations of U.S. antitrust law.

Reviews

Write a Review

Macroeconomics Questions & Answers

  When employees are used the average product of labor

When 50 employees are used, the average product of labor is 50 and the marginal product of 50th worker is 75.

  Explain how does reserve ratio set by the federal reserve

Explain how does the reserve ratio set by the Federal Reserve affect the ability of banks to make loans. Name the tools of the federal Reserve Bank. Which is most important?

  Illustrate what would be a good company with a product

Illustrate what would be a good company with a product or service that would be worthy of further exploration down the line and why.

  Over the past recent months it has been selling its widgets

Over the past recent months it has been selling its widgets for $100 each and unit sales have averaged 5,000 units per month.

  Illustrate what is the correlation between all of these

Illustrate what is the correlation between all of these, and the level of unemployment and spending therefore GDP.

  Illustrate what does this have on the monetary base

Illustrate what does this have on the monetary base, the money supply, total deposits, and economic growth.

  Demand curve and cost function

A company in a perfectly-competitive industry where market price of output prevailing is $50 per unit has a cost function where;

  Compute the abnormal return of stock marketplace portfolio

Compute the abnormal return of Stock Z if the market price is $13.68, the risk-free rate is 4 percent, the return on the marketplace portfolio is 10 percent.

  The wages of players have raised enormously

the wages of players have raised enormously, in particular the salaries of high-quality pitchers.

  Accounting concepts relative to price management

write down the paper only to give a substantive feedback based on accounting concepts relative to price  management

  Question about opportunity cost

Let's say, country A and B both consume and produce only food and clothing. Both countries use only labor to create these two products.

  Calculate the rate of growth of total income

Suppose Harrod-Damar model with fixed capital-output ratio. Suppose that the country saves 20 percent of its income and has a capital or output ratio of 4.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd