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Jessica Alba, a famous actress, starts the baby and family products business, The Honest Company, with Christopher Gavigan. Alba and Gavigan set up their site so families can choose what kinds of non-toxic, all-natural products they'd like to use and get them in a bundle. Families can choose all kinds of products from food to hygiene necessities and cleaning supplies. Suppose they are thinking of expanding their business into five domestic markets: Phoenix, Dallas, Chicago, New York, and Atlanta. Assume their primary goal of business is to maximize economic profits, although they want to do business honestly.
Show all your calculations and process. Describe your answer for each question in three- to five-complete sentences.
You are a business adviser for Alba and Gavigan. Describe a skimming price and a penetration price, and advise them whether they should charge a skimming price or a penetration price, with supportive reasoning for and against each pricing alternative.
The Washington Wizards basketball team began the 2012 season with 12 losses. Tickets to the game against the Blazers cost $1.69 and against the Heat were $26. Draw on the graph: 1- supply and demand for tickets against the Blazers, with appropriate p..
The method used to prepare the budget can also affect the amount of time it takes to complete the budget. For example, companies that use participative budgeting will likely take longer to complete the budget process. What is participating budgeting?..
A risk neutral monopoly must set output before it knows for sure the market price. There is a 50% chance the firm’s demand curve will be P=20-Q and there is a 50% chance it will be P=40-Q. The marginal cost of the firm is MC=Q. The expected profit-ma..
Suppose government spending increases in a closed economy. Would the effect on aggregate demand be larger if the Bank of Canada took no action in response, or if the Bank were committed to maintaining a fixed interest rate.
A consumer has a budget of $200 to spend on bowling (b) and tutoring sessions (t). Assume that each game of bowling costs $16 and each tutoring session costs $20. The consumer derives utility from tutoring sessions and bowling according to the utilit..
Describe the difference between nominal, effective and real interest and calculate what is owed after 5 years for the following example. 10% interest on $100 over the course of 5 years. Where relevant, the compounding period is 1 year. Inflation is 5..
A monopolist faces a demand function x = (1/2)(11-p) where p is the price of the product and x is the quantity demanded. The monopolist has a cost function 3+2x. The government impose a tax of t per unit of output. Assuming that the monopolist maximi..
Bahrainia is a country that has closed borders and does not import or export any goods or services; hence, they do not worry about trade with other countries. Total spending for the federal government of Bahrainia for the last fiscal year was 24.2 bi..
Discuss the main points of chapter 11-New Classical Economics. How does New Classical Economics (rational expectations) differ from the original Classical Model? How does New Classical Economics differ from the Keynesian position?
Is market capitalism necessary for freedom? Explain why or why not. Are market economies necessarily “capitalist” and are command economies necessarily “socialist”? Why or why not? What causes macroeconomic instability of market capitalism? Explain.
The market supply curve for a perfectly competitive, constant cost industry is:
The creation of new bank reserves could lead to a multiple increase in the money supply. Contractionary monetary policy shifts the reserve supply schedule inward. When a government intentionally lowers the value of its currency, that is called deprec..
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