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Elasticity and Cost Concepts
1. You've been hired by an unprofitable firm to determine whether it should shut down its unprofitable operation. The firm currently uses 50,000 workers to produce 200,000 units of output per day. The daily wage (per worker) is $80, and the price of the firm's output is $25. The cost of other variable inputs is $400,000 per day. Although you don't know the firm's fixed cost, you know that it is high enough that the firm's total costs exceed its total revenue. Provide a report to management of the firm as to whether or not it should continue to operate at a loss? Be sure to show your work to support the decision you outlined in your report.
2. Suppose the price of apples rises from $3 a pound to $3.50 and your consumption of apples drops from 35 pounds of apples a month to 20 pounds of apples. Calculate your price elasticity of demand of apples. What can you say about your price elasticity of demand of apples? Is it Elastic, Inelastic, or Unitary Elastic? Be sure to show the work you used to support your answer.
What is autarky price and quantity equilibrium for both home and foreign? What is the open trade price and volume under free trade.
Application of Nash Equilibrium and Game Theory with examples
Fill in the table indicating whether the new Each row and column heading describes a shock to a market initially in equilibrium. Fill in the table indicating whether the new equilibrium price and quantity will increase, decrease, or not change.
These costs are depends on a budgeted volume of 80000 units developed and sold every year. Lafluer uses cost-plus pricing methods to set its target selling price.
Explain how much control might an organization have over pricing based on a product's elasticity
Consider the following data on US GDP-What was the grwoth rate of the GDP deflator between 1999 and 2000?
Top Gun Marketing, Inc., offers overhead banner fly-by promotion services using their Cessna aircraft and banner creation facilities.
State with brief reasons whether the following statements are true, false, or uncertain.
Write a 400- to 700-word memo to the economic adviser. Describe the change in tax revenues for the government in the new equilibrium, in both the short and longer terms.
What are the advantages of Fed increasing interest rates if the GDP gap is positive?
Illustrate what relative amounts of capital and labor will be employed to maximize output.
We have learnt that in a perfectly Competitive market, all cost savings from a technological advance are passed along to cnsumer in the form of lower prices
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