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Suppose that the demand function for a monopoly is given by
Q(A,P) = 100-P+A^0.5, where Pis price, and A is its advertising level. Its marginal cost is 5, and its marginal cost of advertising is 1. Calculate the output level, price level for profit maximization. What is the optimallevel of advertising?
Consider a monopoly that can distinguish between every consumer, knows each consumer's willingness to pay and may charge different prices.
Suppose that when income increases by 10%, the quantity demanded of gasoline increases by 3%. What is the income elasticity of gasoline? Based on your answer, is gasoline a normal or inferior good? Is it a necessity or a luxury?
Your shopping choices are limited to Old Navy,The Gap or Banana Republic. How do you spend your money and why?
Thorpe Mfg., Inc., is currently operating at only 88 percent of fixed asset capacity. Current sales are $320,000. Suppose fixed assets are $250,000 and sales are projected to grow to $357,000. How much (in dollars) in new fixed assets is required to ..
A nominal rate of 14% should be used as the MARR. What equivalent annual interest rate is the second contractor offering? Which contractor’s offer would you accept? Repeat the analysis with the NPV technique.
On the topic of Economic growth: i. What does it mean? ii. How can it be graphically represented? iii. What are the prerequisites to Economic growth? iv. Why is Economic growth important? v. What factors tend to limit growth? The Presentville – Futur..
Problem: As a policy analyst, you have measured the costs and benefits of three policy options as follows:
You are a division manager at Toyota. If your marketing department estimates that the semiannual demand for Highlander is Q = 80,000 −1.2P, what price should you charge in order to maximize revenue from sales of the Highlander?
Explain the basis of one of the Leading Economic Indicators. What local indicators of improved economic conditions might one see in his or her local community, town or city?
Maria has $8,000 in a two-year certificate of deposit (CD).
Describe why teenagers tend to accumulate low wages yet proportionally higher human capital than adult workers.
Why a favorable shock to the production function tends to reduce the price level, P. How could the monetary authority prevent this fall in P.
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