Will revenues increase or decrease in the short and long run

Assignment Help Econometrics
Reference no: EM131072562

Waterson Power Corporation's regulator has just allowed a rate increase from 9 to 11 cents per kilowatt hour of electricity. The short-run demand elasticity is -0.6 and the long-run demand elasticity is -1.2.

(a) What will be the percentage reduction in power demanded in the short run?

(b) What will be the percentage reduction in power demanded in the long run?

(c) Will revenues increase or decrease in the short and long runs?

Reference no: EM131072562

Questions Cloud

At what rate does the firm break even : Consider a firm with a contract to sell an asset for $137,000 five years from now. The asset costs $73,000 to produce today. Given a relevant discount rate on this asset of 13 percent per year, calculate the profit the firm will make on this asset. A..
What range of prices is demand inelastic : For this demand curve, over what range of prices is demand inelastic?
Identify a group of children with leukemia : We measure the standing heights of five basketball players and find that Thom is 203 cm tall; Ram is 204 cm tall; Malcolm is 201 cm tall; Joshua is 204 cm tall; and Sylvia is 202 cm tall. What kind of graph (not table) would we use to display thi..
Pair-wise fashion with respect to one performance measure : Suppose 4 scenarios were compared in a pair-wise fashion with respect to one performance measure. How many comparisons are made? If a = 0.01 is used for all comparisons, what is the upper bound on the a for all the comparisons made?
Will revenues increase or decrease in the short and long run : Will revenues increase or decrease in the short and long runs?
What is net present value of this project at discount rate : Fun Land is considering adding a miniature golf course to its facility. The course would cost $64000, would be depreciated on a straight line basis over its 4 year life, and would have a zero salvage value. The estimated income from the golfing fees ..
Write a driver program teststackumuc : Write a driver program TestStackUMUC, implemented as a separate class, to test the class StackUMUC . Test the class for the JDK types Double and String and for the user defined type Point.
What is the equation of the tangent line to the graph : MATH233 Individual Project- For your function what is the instantaneous rate of change in maximum error-free channel capacity with respect to SNR, for SNR=30? What is the equation of the tangent line to the graph of C(SNR), when SNR=30
Generate the two random number streams : a. Generate the two random number streams, corresponding to interarrival time and operation time at station A, for the first ten arriving entities in the two workstation in a series model.

Reviews

Write a Review

Econometrics Questions & Answers

  How to identify the explicit versus implicit costs

You have worked as a real estate agent for 10 years and are earning about $100,000 per year with your current agency. You prepared the following information to use in evaluating the financial feasibility of starting your own agency.

  Eliminate the potential for the phc tax

The corporation has several personal service contracts with advertising agencies and endorsements for your client in addition to passive income. Propose a plan in which you eliminate the potential for the PHC tax on the client's corporation.

  What is the cost of common equity and the wacc

Patton Paints Corporation has a target capital structure of 40% debt and 60% common equity, with no preferred stock. Its before-tax cost of debt is 12% and its marginal tax rate is 40%. The current stock price is P0 = $22.50. The last dividend was..

  1 suppose a local food retailer firm has the following cost

1. suppose a local food retailer firm has the following cost function that depends on the daily sales of two goods soft

  Is the industry in the long run competitive equilibrium

A firm is a purely competitive industry is currently producing 1000 units per day as a total cost of $600. If the firm produces 1200 units per day its total cost is $600. If the firm produces 1000 units per day its total cost would be $400.

  Determine what is the growth rate in gdp per capita

Suppose an economy's real GDP is $50,000 in year 1 and $55,000 in year 2. What is the growth rate of its GDP Assume that population was 100 in year 1 and 105 in year 2. What is the growth rate in GDP per capita

  What is the profit-maximizing level of output

Miguel is a farmer who produces oats. The oat market is a pure competition market. Miguel is now making choices in the short run. The going rate for oats is currently $24 per unit. The total cost function is as the table above shows. What is the p..

  Calculate the total out-of-pocket cash you will spend

You are going to borrow $350,000 for a term (number of years) corresponding to 20 at a 6% interest rate. Calculate the following: a) The monthly payment b) The total out-of-pocket cash you will spend to completely pay off the loan

  By what time would additional two stories have to be built

The first provides foundation and structural details so that two additional stories can be added to the required initial two stories at a later date and without modifications to the original structure. by what time would the additional two stories ..

  What is the value of call option using black-scholes model

An analyst wants to use the Black-Scholes model to value call options on the stock of Ledbetter Inc. based on the following data: The price of the stock is $40. The strike price of the option is $40. The option matures in 3 months (t = 0.25).

  Determine what is the expected return of the stock

Suppose that the change in price of stock is a random variable X that can assume only the four different values -20, 0, 10, and 30, and that P(X=-20)=0.1,P(X=0)=0.4,P(X=10)=0.3,and P(X=30)=0.2. What is the expected return of the stock

  How much will be supplied by the dominant salon

The marginal cost function of all the small salons together is SMCF = 4 + .1Q, and the marginal cost function of the dominant or leading salon is MCL = 7 + .1Q. (c) If the large salon forms a centralized cartel. what would be the best level of out..

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