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The only road connecting two populated islands is currently a freeway. During rush hour, there is congestion because of the heavy traffic. The marginal external cost from congestion rises as the amount of traffic on the road increases. At the current equilibrium, the marginal external cost from congestion is $5 per vehicle. Would a toll charge of $5 per vehicle lead to an economically efficient amount of traffic? If not, would you expect the economically efficient toll to be larger than, or less than $5?
The optimum output and price level is always determined with the concepts of revenue and costs-the difference in joint or independent production will show in the differences in cos
Appropriate Management of Sales: Demand forecasts are made area wise and after that sales targets for various areas are set in view of that. This helps the calculation of sales pe
Problem 1: Using relevant examples, discuss the pricing strategies that firms can use to capture value from their customers. Problem 2: You are a manager in a perfectl
Given the following payoff matrix (a) indicate the best strategy for each firm (b) why is the entry deterrent threat by firm Ato lower the pruce not credible
Factors influencing Exchange Rates i. Inflation: Other things being equal, a country experiencing a high rate of inflation will experience a lower demand for its goods whil
Prediction markets: These are speculative markets fashioned with the intention of making predictions. Assets which are produced possess an ultimate cash worth bound to a specific
Q. Show Normal profit equilibrium? Normal Profits: With the condition of MC = MR and MC cuts the MR from below, if E is the point of stable equilibrium, output of firm is OM
A firm in a perfectly competitive market invents a new situation of production that lowers its marginal costs. What happens to its output? What happens to the price it charges?
Bikes-for-two, Inc., produces tandem bicycles. Its costs have been analyzed as follows: VARIABLE COST Materials $30/unit Manufacturing labor 3 hours/unit ($8/hour) Assembly labor 1
You have recently gained employment with a computer consultancy company. Due to your specialist knowledge in the areas of Human Factors and usability, your manager considers that y
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