Will you make any profits in the short run, Managerial Economics

Assignment Help:

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 perfectly competitive market. The price in the market is $20. Your costs are represented by TC = 8 + 2Q + 0.5 Q2.

(a) What is your firm's added value?

(b) What level of output should you produce in the short run?

(c) Will you make any profits in the short run?

(d) Explain using demand and supply analysis what happens in the long run. What is the long-run market price and your equilibrium quantity of output?

(e) Suppose a change in consumer preferences forces the market price down to $4. How would you respond in the short run? In the long run? What do your answers depend on?

(f) Briefly explain under what conditions the model of perfect competition is an inadequate descriptor of market forces, even if there exist many buyers and many sellers.


Related Discussions:- Will you make any profits in the short run

Explain supernormal equilibrium, Q. Explain Supernormal Equilibrium? S...

Q. Explain Supernormal Equilibrium? Supernormal Equilibrium: E is the point of stable equilibrium as MC = MR and MC cuts the MR from below.   Figure: Supernormal Equ

Exceptional supply curves, Exceptional supply curves In have some situ...

Exceptional supply curves In have some situations the slope of the supply curve may be reversed.   i)   Regressive Supply.   In this case, the higher the price within a ce

Current account, The Current Account This records all transactions inv...

The Current Account This records all transactions involving the exchange of currently produced goods and services and is subdivided into i.          Visibles: A record

The spendthrift economy, The Spendthrift Economy This assumes a circul...

The Spendthrift Economy This assumes a circular flow of income in a closed economy with no Government sector and no foreign trade.   It also assumes the existence of two sect

Determine the perfectly competitive firms profit, 1. Suppose in a perfectly...

1. Suppose in a perfectly competitive industry the market demand and supply forces combine to produce a short-run equilibrium price of Rs 70. Suppose that a firm in this industry h

Measures to control inflation, Measures to control inflation An inflat...

Measures to control inflation An inflationary situation can effectively be addressed/tackled if the cause is first and foremost identified.   Governments have basically three

Budget line and its economic interpretation, The Budget line and its econom...

The Budget line and its economic interpretation The indifference curve shows us consumer preferences but it does not show us the situation in the market place.  Here the consu

Marginal cost, A firm in a perfectly competitive market invents a new situa...

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?

Determine the negotiate a wage increase, Mark works for Maple Feel Inc., wh...

Mark works for Maple Feel Inc., which exports maple syrup to Slovakia. Currently, he generates $60,000 a year of net revenues for the firm and his salary is $60,000 per year. Mark

Write Your Message!

Captcha
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