What effect with congress have on the optimal price

Assignment Help International Economics
Reference no: EM13238400

The US cigarette industry has negotiated with Congress and government agencies to settle liability claims against it. Under the proposed settlement, cigarette companies will make fixed annual payments to the government based on their historic market shares. Suppose a manufacturer estimates its marginal cost at $1.00 per pack, its own price elasticity at -2, and sets its price at $2.00. That company's settlement obligations are expected to raise its average total cost per pack by about $.60. What effect with this have on its optimal price?

Reference no: EM13238400

Questions Cloud

Find the new capacitance : A parallel plate capacitor is composed of two square plates, 8.5 cm on a side, separated by an air gap of 1.00 mm, Find the new capacitance
How much time elapses before the compass hits the ground : A hot-air balloon is rising upward with a constant speed of 3.88 m/s. When the balloon is 7.87 m above the ground, How much time elapses before the compass hits the ground
What price will the profit-maximizing monopolist charge : Suppose a monopolist faces the following demand curve: P = 596 - 6Q. Marginal cost of production is constant and equal to $20, and there are no fixed costs. a)  What is the monopolist's profit-maximizing level of output
What is the submarines maximum safe depth in salt water : A research submarine has a 10-cm-diameter window that is 8.9cm thick, What is the submarine's maximum safe depth in salt water
What effect with congress have on the optimal price : The US cigarette industry has negotiated with Congress and government agencies to settle liability claims against it. Under the proposed settlement, cigarette companies will make fixed annual payments to the government
Why the federal minimum wage stayed frozen : Compared to other countries, the U.S. has had a low level of inflation since 1983. The only years that the inflation rate was over 4% for consecutive years 1988-1991. From 1987 to 1992 the CPI went from 113.6 to 140.3.
Find maximum velocity of spring when released from rest : A mass of 0.006 kg is attached to a spring that requires a force of 0.01 N to extend it 0.05 meters greater than its natural length, Find maximum velocity of spring when released from rest
Why industry environment is significantly different today : five firms supplied amateur color film in the United States: Kodak, Fuji, Konica, Agfa, and 3M. From a technical viewpoint, there was little difference in the quality of color film produced by these firms, yet Kodak's market share was 67 percent.
Explain the columns change and revised equilibrium : The biggest problem I'm running into is how to complete the ICE chart for the columns Change and Revised Equilibrium. I don't know where those numbers come from.

Reviews

Write a Review

International Economics Questions & Answers

  What is the gnp number refer to is nominal gnp

In a 1990 article assessing the 1980's, Time reported that: "The good news is that U.S. gross national product doubled during the 1980s, from $2.7 trillion to $5.3 trillion." The GNP number they refer to is nominal GNP.

  Global financial contagion in future

The world economy retrenched in wake of a global financial crisis. Did globalization of capital markets contribute to this crisis? If so, what can be done to stop global financial contagion in future?

  Which of company appears to operate as a channel captain

World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the U.S. Raul Fernandez, the firm's marketing manager, is comparing his firm's distribution with two major competitors. 1) WTB sells its products through four regional distribut..

  Discussion on reducing protection

Describe some models that forecast the effect that reducing protection Tariffs will have on factor prices Labour and capital.

  Swiss membership in the european union

The European Union is a supranational management that has been capable to overcome tremendous national diversity consider of how different Germany, UK, Italy, Spain etc...

  What does california say about the deman for citrus

Sometimes when the citrus crop freezes in California or Flordia, the media report that even though there are fewer fruit available for consumers, "the total value of the crop has increased," or words to that effect.

  What is the value of adjustment factor

During field calculation, it is shown that the calculated number of trips is actually 128. What is the value of the adjustment factor?

  Foreign income and repatriation of earnings

Describe both foreign income and repatriation of earnings using 3-examples that any worker can understand.

  Example on benefit-cost analysis

Which of these concepts can be used to formulate a practical choice criterion in benefit-cost analysis and why may it be difficult to use one or more of the others in this way.

  Explain the assumptions that go into the correct formula

Specify the correct and \simpli ed" formulas for this rate of returnfrom the text and course lectures, and explain the assumptions that go into thecorrect formula.

  What would be effect the price of gas in the us

in US, gas cost 2.5 per gallon. in italy, gas cost 6 per gallon. what effect dose this price differential likely  have on a.the size of cars in us and italy b. the use of public transportation the us and italy c.the fuel efficiency of cars in the us ..

  Would you plan to expand production or cut back

Does this change in the value of the dollar make imports cheaper or more expensive for Americans Are American exports cheaper or more expensive for importers of U.S. goods in Great Britain Illustrate by showing the price of a U.S. cell phone in ..

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