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Suppose there are only two automobile companies, Ford and Chevrolet. Ford believes that Chevrolet will match any price sets, but Chevrolet too is interested in maximizing profit. Use the following price and profit data to answer the following questions. Ford's Selling Price Chevrolet's Selling Price Ford's Profits(mills) Chevrolet's Profits(mills) $ 4,000 $ 4,000 $ 8 $ 8 4,000 8,000 12 6 4,000 12,000 14 2 8,000 4,000 6 12 8,000 8,000 10 10 8,000 12,000 12 6 12,000 4,000 2 14 12,000 8,000 6 12 12,000 12,000 7 7 a. What price will Ford charge? b. What price will Chevrolet charge once Ford has set its price? c. What is Ford's profit after Chevrolet's response? d. If the two firms collaborated to maximize joint profits, what price would they set? e. Given your answer to part (d), how could undetected cheating on price cause the cheating firm's profit to rise?
Respond to each of the following questions that apply the economic concepts described in this topic's assigned readings inThe Economics of Health and Medical Care.
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Suppose that you are the general manager at a plant that will be closing in one year. It is a small plant, and so is not subject to the Worker Adjustment and Retraining Notification Act (WARN). Must you give your employees advance notice of the closi..
Compute the growth rate of the dividend, g. (You can either compute the ROE*plowback ratio or compute the annual growth rate of dividends) e) Based on this information, what should the price of the stock be today using the constant-growth dividend d..
Are Americas best days behind it
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