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A monopoly is considering selling several units of a homogeneous product as a single package. A typical consumer’s demand for the product is Qd = 130 - 0.5P, and the marginal cost of production is $180. a. Determine the optimal number of units to put in a package. b. How much should the firm charge for this package?
Illustrate what is happening to the U.S. real exchange rate in each of the following situations. Explain. The U.S. nominal exchange rate is unchanged, but prices rise faster in the U.S. than abroad.
Markets often produce results that are economically efficient which allows society to get the most use from scarce resources. What is the relationship between benefits and cost when this occurs? Why is price the critical factor insuring this result?
Stores are competing in rental DVDs they have symmetric inverse demand P=310-Q marginal cost $30 with n-firm model what is quantity each firm produce. What are profits each receive
illustrate what can you say about the price elasticity of demand for DVD players. Will this price reduction necessarily lead to an increase in profits for DVD player manufacturers.
Think of another good that you have purchased recently (or you could continue with the good you selected in TDA I). Be specific (e.g. is it breakfast cereal in general or Cheerios cereal specifically). If the price of this item increases, how would t..
What are the MPC and APC all about? Compare and contrast these concepts? is it better to have a high propensity to consume or lower? Which people fit the high versus the low category?
Suppose that you save all of your money to spend next year. Explain how much will you be able to spend next year. How much will you be able to spend this year.
Which of the following statements about the monopolistically competitive market, in the long run, is true?
What is the contribution margin per unit? What is the contribution margin ratio? What is the variable expense ratio? If sales increase to 1,001 units, what would be the increase in net operating income?
Given that it takes 5 yards of textile to make a suit whose free trade price is $150.00 and that the textile sells for $20.00 per yard. Calculate (i) the NRP and the ERP if the government is to impose a $30.00 tariff per suit and (ii) what happens to..
Does it matter if a central bank (Fed in US) is independent of the government? Why do you think that matters? What would happen (or likely to happen) if Fed was not independent of the US government? Can you think of any country that their central ban..
There is an old saying about the benefits of Marriage - that "Two can live as cheaply as One". What economic principle substantiates this claim? Diminishing marginal returns Law of Supply Economies of Scale Economies of Scope.
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