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Suppose that a paper mill "feeds " a downstream box mill. For the downstream mill, the marginal profitability of producing boxes declines with volume. For example, the first unit of boxes increases earnings by $10, the second $9, the third $8, and so on, until the tenth unit increases profit by just $1. The cost the upstream mill incurs for producing enough paper to make one unit of boxes is $3.50. a. if the two companies are separate profit centers, and the upstream paper mill sets a single transfer price (the price the box company pays the paper mill), what price will it set, and how much money will the company make b. if the paper mill were forced to transfer at marginal cost, how much money would the company make?
disuss with an aid of a diagram the kinked demand curve
Equilibrium in Money Markets Having dealt with the forces that determine the supply of money and demand for money, let us combine supply of and demand for money to determine eq
what are the purposes of taxation?
1a. Show on the market for milk the effect of the introduction of BGH (bovine growth hormone). 1b. Show on the market for cheese the impact of what happened in the milk market.
Informal groups exist in almost every kind of organization. Answer the following questions and provide examples to support your position: • What types of informal groups do you
Two firms, producing an identical good, engage in price competition. The cost functions are c1 (y1) = 1:17y1 and c2 (y2) = 1:19y2, correspondingly. The demand function is D(p) = 80
Given the data in the table below, provide an estimate of the arc price elasticity of demand for green and chai tea. Chai tea Price $/lb. 10.4, 10.5 Chai tea Quantity mil lbs. 75
Explain why we cannot measure the national product simply by adding up the production of all firms. Why do the economists use real GDP rather than nominal GDP to gauge economic
Private sector in the circular flow The private sector total income is known as the national income. Because private sector receives the entire return from the factors of pr
Axiom of completeness: Consumer's choice is complete. Implication: Since consumer is rational, she must have a unique preference relation. That means the consumer choice is ei
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