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Vik and Fleet produce trainers in the sports-shoe market. For one of theirmain products they have the following demand curves:Vik PV ¼ 175 1:2QVFleet Pf ¼ 125 0:8Q fwhere P is in £ and Q is in pairs per week.The firms are currently selling 80 and 75 pairs of their products per weekrespectively.
a. What are the current price elasticities for the products?
b. Assume that Vik reduces its price and increases its sales to 90 pairs andthat this also causes a fall in Fleet's sales to 70 pairs per week. What isthe cross-elasticity between the two products?
You have the chance to buy either one of two bonds. The first is a tax-free municipal with a coupon yield of 6.5%. The second is a corporate bond with a yield of 8.5%. Both bonds are rated AA. Your tax rate is 28%.
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An owner can lease her building for $100,000 per year for three years. The explicit cost of maintaining the building is $35,000, and the implicit cost is $50,000. All revenues are received, and costs are borne, at the end of each year. If the inte..
Suppose that a color-blind consumer, has $80 to spend on either pink or lime-green sweaters. He does not care what color he weards but deems it very important to buy as many sweaters as possible with $80.
Workers who do not participate in any fitness programme suffer a drop in productivity of 50 per cent in their last two hours of work each day
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