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You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1's elasticity of demand is -2, while group 2's is -3. Your marginal cost of producing the product is $30.
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The manager of a local monopoly estimates that the elasticity of demand for its product is constant and equal to -2. The firm's marginal cost is constant at $15 per unit.
a. Express the firm's marginal revenue as a function of its p...
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38. An economist estimated that the cost function of a single-product firm is:
C(Q) = 60 + 30Q + 25Q2 + 5Q3.
Based on this information, determine the following:
a. The fixed cost of producing 10 units of output.
Question 1. Page 154 (with some modifications)
A consumer has $300 to spend on goods X and Y. The market prices of these two goods are Px = $15 and Py = $5.
a. Draw the budget constraint. I.e. provide a carefully labeled diagram
b. What is the market rate of substitution? Give an interpretat...
The U.S. government spends over $33 billion on its Food Stamp program to provide millions of Americans with the means to purchase food. These stamps are redeemable for food at over 160,000 store locations throughout the nation, and they cannot be sold for cash or used to purchase nonfood items. Th...
a) Consumers' opportunity set show the various combination of two good that are available given the amount of income and prices? Do you agree or disagree. Discuss
b) Suppose all prices doubled and at the same time consumers' income also doubled, will this alter the consumer's opportunity set. If ...
1.The opportunity cost of receiving 100 dollars in the future as opposed to getting that 100 dollars today
a.The foregone interest that could be earned if you had the money today.
b.The taxes paid on any earnings.
c.The value of $100 relative to the total income of that person.
d.The value ...
1. If the interest rate is 5% and cash flows are $100 at the end of year one and $200 at the end of year two, then the present value of these cash flows is
A. $256.20 B. $325.50 C. $439. D. 276.65
Show all work. The use of the time line is useful in explaining your answer.
2. If you pu...
Short Discussion 1
* Name one good where your price elasticity of demand is greater than one (that is, your demand is elastic). If you were the manager of the company that sells this good, what considerations would you make before changing the price?
* Name two goods where your cross-price elasti...
1. What is price elasticity of demand?
3. What does this mean?
Discuss. Don't simply give your answer
2. You are on a committee that is considering ways to raie tuition fees for your College. You would recommend increasing the price of tuition only if you thought the demand curve for tuition...
Katrina's Candies is operating in the monopolistically competitive market structure and faces the following weekly demand and short-run cost functions:
VC = 20Q+0.006665Q2 with MC=20 + 0.01333Q and FC = $5,000
P = 50-0.01Q and MR = 50-0.02Q
*Where price is in $ and Q is in kilog...
10) A worker views leisure and income as "goods" and has an opportunity to work at an hourly wage of $15 per hour.
a Illustrate the worker's opportunity set in a given 24-hour period.
b Suppose the worker is always willing to give up $11 of income for each hour of leisure. Do her preferences exh...
Managerial Economics and Business Strategy by Baye.
Chapter 4 #6, 9 solution answer
6) In the following figure, a consumer is initially in equilibrium at point C. The consumer's income is $400, and the budget line through point C is given by $400 = $100X + $200Y. When the consumer is given a ...
You are a manager of a chemical company. An accident has occurred in which chemicals leaked into the ground water nearby. The community is unaware of the accident.
1. Compare the primary costs involved in cleaning up the water immediately (and thus confessing) versus hiding your culpability now an...
Southwest Airlines begins a "Bags Fly Free" campaign, charging no fees for a first and second checked bag. Does this situation best represent
a) Producer-producer rivalry?
b) Consumer-consumer rivalry?
c) Producer-consumer rivalry?
Explain your choice.
What is t...
Suppose that the demand for pizza increases. Carefully explain how the rationing function of price will restore market equilibrium. Explain the long-run effects of the guiding function of price in this scenario.
•Is the advice, "Know your customer" a management strategy or economic concept or both? Explain.
•How can managers use economic concepts to manage more strategically? Give three specific examples.
•How does making tradeoffs apply to business management?
• Consider ...
Examine the key factors affecting the demand for and the supply of a good for a candy company selling sugar-free candy. Distinguish between a change in demand and a change in the quantity demanded (movement along the demand curve).
From the above, indicate the factors that are responsible for a s...
Need help with homework assignment. Submit in word document.
An industry consists of three firms with sales of $300,000, $700,000, and $250,000.
a. Calculate the Herfindahl-Hirschman index (HHI).
b. Calculate the four-firm concentration ratio.
c. Do you think the Department of Just...
It is estimated that over 100,000 students will apply to the top 30 M.B.A. programs in the United States this year.
a. Using the concept of net present value and opportunity cost, explain when it is rational for an individual to pursue an M.B.A. degree.
b. What would you expect to happen to t...
I need some help in answering these two questions:
1. An airplane manufacturer has annual fixed costs of $50 million. Its variable cots are expected to be $2 million per plane. If the manufacturer wants to earn a 10 percent rate of return on its investment of $400 million and expects to produce 10...
7. Problem-solving question: Use the following data for a firm's output at various levels of employment (L) to calculate: a) its marginal physical product of labor (MPPL) schedule; (b) its (MPPL/MRCL) schedule, given a fixed wage (W = MRCL) of $25 per hour per worker. (c) Assuming that capital (K...
XYZ Corporation is experiencing an average collection period of 120 days. The industry average is about 75 days. The firm has also experienced an increase in its business in the last 2 years and has been buying more inventory. The management wants to increase the amount of permanent inventory stock,...
See the attachments.
1) Which of these items are relevant to Ortiz's decision about which of these products it will launch?
The following items are relevant to Ortiz's decision: additional development costs, unit-level costs, bath-level costs and product live cycle. The two items that are not ...
A. Reserve Prices
A reserve price is a minimum price set by the auctioneer. If no bidder is willing to pay the reserve price, the item is unsold at a profit of $0 for the auctioneer. I f only one bidder values the item at or above the reserve price, that bidder pays the reserve price. An auctioneer...
Now that many businesses have upgraded to an online platform, are paper catalogs a thing of the past? Let's look at this from both sides of the table, both the consumer and the manager. Would you rather have an online or a paper catalog? What are the advantages and disadvantages of each.
Discuss the individual contributions that could be made by a cross-functional team to the following list of activities. Assume the team consists of engineering, manufacturing, and supply management personnel.
a. Specifications Development
b. Market Analysis
c. Productivity/cost improvements
It's Friday night, and you are just about to leave your room to attend a party. However, a copy of the New York Times catches your eye. More specifically, there's an article about champagne. The article describes a successful marketing campaign by the champagne industry that changed consumers' taste...
Two months ago, the owner of a car dealership (and a current football star) significantly changed his sales manager's compensation plan. Under the old plan, the manager was paid a salary of $6000 per month: under the new plan she receives 2 percent of the sales price of each car sold. During the pas...
A new manager recently was given an assignment to create two possible wage schemes for a design firm. The manager came up with the following packages: (1) Each employee will start at $15 per hour and will work eight hours per day; (2) each employee will receive $8 per hour and one-tenth of 1 percent...