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When McDonald's corp. reduced the price of its big mac by 75% if customers also purchased french fries and a soft drink. The Wall Street Journal reported that the company was hoping the novel promotion would revive U.S sales growth. It didn't. Within 2 weeks sales had fallen. Using your knowledge of game theory , what do you think disrupted McDonald's plan?
If an excise tax is imposed on a commodity in order to raise revenue for the government or to reduce the consumption of the good, then what is the relevance of the price elasticity of demand in determining which of the goals is likely to be most ..
Calculate the price elasticities of demand for A and B at P=30, 20 and 10. How does the elasticity change as you move down the demand curve?
One advantage of forming a business as a corporation is: the business is subject to less taxes and fewer government regulations limited liability management can make quick decisions individual stockholders can influence daily business
Calculate what would be the minimum annual vehicle use in km/year that would justify the choice of a diesel engine car over the petrol version? Does this correspond to your answer to 4) above?
Calculate the equilibrium price and quantity. Sketch the supply and demand curves on a graph indicating the equilibrium.
The federal government is planning a hydroelectic project cor a river basin. In addition to producing electric power, this project will provide flood control, irrigation, and recreational benefits. Find the benefit-cost ratio for each alternative.
Find the Cournot solution for the market price and output of mineral water and illustrate with a simple graph and the marginal revenue function facing a monopolist is given by: MR = 200-20Q Demonstrate that firms A and B have an incentive to coopera..
Explain the most important characteristic in perfect competition, monopolistic competition, oligopoly, and monopolies and relate the characteristic to how these firms can make profits in the short run. In your analysis, make sure to relate an exa..
Estimate the cash flow to be included in the horizon year and what will be the horizon value if there is no profit growth?
Good Grapes is selling grapes in a purely competitive market. Its output is 5000 pounds, which it sells for $5 a pound. At the 5000-pound level of output, the average variable cost is $4.00, the marginal cost is $4.25, and the average total cost i..
Assume also that South Africa is a net importer of maize and imports maize mostly from the US. The FOB at US Gulf port is US$350 per tonne (1 tonne =1000 kg). Assume freight, insurance and unloading (FIU) cost at Durban is 150 Rands per tonne.
Suppose the wage rates of workers are based on the expected price level. If there is an unexpected increase in AD, it will cause the actual price level to increase. Then workers should raise their expected price level and negotiate a higher wage r..
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