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Demand & Supply

Market equilibrium price and quantity (in the short run)

Please help with the following problem. For each of the following changes, show/describe the effect on the DEMAND CURVE and state what will happen to market equilibrium price and quantity (in the short run). a. Consumers expect that the price of the good will be higher in the future. b. The price of a substitute good ris

Consummate and Calculated Risk

The United States is known for its consummate "risk-takers". Research the concept of "calculated risk" at this web site (http://www.calculatedriskblog.com/ ) or any others, and address the following: ? Describe an example of risk calculation found on the web. ? What risk calculation technique is illustrated by your

1. If a representative firm with total cost given by TC = 20 + 20q + 5q2 operates in a competitive industry where the short-run market demand and supply curves are given by QD = 1,400 - 40P and QS = -400 + 20P, the number of firms operating in the short run will be:

1. If a representative firm with total cost given by TC = 20 + 20q + 5q2 operates in a competitive industry where the short-run market demand and supply curves are given by QD = 1,400 - 40P and QS = -400 + 20P, the number of firms operating in the short run will be: 2. If the profit-maximizing markup price is marginal cost t

Elasticity and Demand: Demand Analysis

Text Problem: Aztec Enterprises depends heavily on advertising to sell its products. Management at Aztec is allowed to spend $2 million monthly on advertising, but no more than this amount. Each month, Aztec spends exactly $2 million on advertising. What is Aztec's elasticity of demand for advertising? Can you write the equ

The FCC blocked the merger of Sirius and XM radio for a couple years while they both bleed red. Finally, they approved them to become a monopoly.Still, XM/Sirius doesn't have that much pricing power... I wonder why?

Please help with the following problem. A Duopoly - An example WAS satellite radio. The FCC blocked the merger of Sirius and XM radio for a couple years while they both bleed red. Finally, they approved them to become a monopoly. Still, XM/Sirius doesn't have that much pricing power. I wonder why?

To make a case of cookies, Walker Shortbread Company uses 10 pounds of butter, 20 pounds of flour, 5 pounds of sugar, and 10 ounces of salt. Currently, butter costs $1.50/lb, flour costs 25¢/lb, sugar costs 50¢/lb and salt costs 80¢/lb (or 5¢ per ounce).Which input demand is most elastic, and which is least elastic?

To make a case of cookies, Walker Shortbread Company uses 10 pounds of butter, 20 pounds of flour, 5 pounds of sugar, and 10 ounces of salt. Currently, butter costs $1.50/lb, flour costs 25¢/lb, sugar costs 50¢/lb and salt costs 80¢/lb (or 5¢ per ounce). Which input demand is most elastic, and which is least elastic?

Demand

The demand for energy in the United States is often described as persistently non-cyclical and not sensitive to both prices effects. Given these characteristics, describe the effect of each of the following on the demand or supply for gasoline. Further indicate the likely direction in the amount of gasoline exchanged the resulta

Short and Long-term costs business comparisons

DISCUSSION QUESTION.1 Short and Long-term costs business comparisons. Select directly comparison business concepts and generally discuss the FC, VC, break-even quantities, economies of scale and diseconomies of scale for each. Feel free to make assumptions, but don't get into detailed cost analysis. Here's a couple example/pairs

Economics Question on Arc Elasticity

Facts: Company XYZ Sells Drums Sets. At a price of $600 per set, they sold 500 Sets per month. The new manager decided that the company needed more revenue so she increased the price to $700 per set. However the company is now selling only 200 drum sets per month at the new price. Questions: 1.What is the arc price el

How would you know demand has increased? (What is the first piece of information which would lead you to conclude that demand has increased?) b. What is the first thing you would do in response to the change in this market signal? c. What might be the second thing you would do and why? d. What may be the benefit or danger connected with your decision to respond to the change in events and how could you decrease the "danger" and increase the "benefit?"

a. How would you know demand has increased? (What is the first piece of information which would lead you to conclude that demand has increased?) b. What is the first thing you would do in response to the change in this market signal? c. What might be the second thing you would do and why? d. What may be the benefit or d

Economics review questions

Do the firms in an oligopoly act independently or interdependently? Explain your answer. A monopolistically competitive firm has the following demand and cost structure in the short run: OutPut Price FC VC TC TR Profit/Loss 0 $90 $90 $0 _

Business effects from supply or demand changes are noted.

a. Why do you think it is important for managers to understand the mechanics of supply and demand both in the short run and in the long run? b. Give examples of companies whose business was either helped or hurt by changes in supply or demand in the markets in which they were competing.

Demand Curve Faced by Competitive Firm/Competitive Market

1. How does the demand curve faced by a perfectly competitive firm differ from the market demand curve in a perfectly competitive market? Explain. 2. A perfectly competitive firm has the following fixed and variable costs in the short run. The market price for the firm's product is $140. Output FC VC

Effect of Free Trade, Tariffs and Quotas on the Sugar Market

Tasmania is a small region. Suppose the following equations characterize Tasmania's demand (Qd) and supply (Qs) for sugar: Qd = 100 - P Qs = P The price of sugar in world markets is PW = $20 a) What would be the equilibrium price in Tasmania's sugar market if imports were totally restricted? b) If Tasmania opens its sugar

Long-run Market Adjustment Under Perfect Competition

Firm Z, operating in a perfectly competitive market, can sell as much or as little as it wants of a good at a price of $16 per unit. Its cost function is C=50+4Q+2Q^2. The associated marginal cost is MC=4+4Q, and the point of minimum average cost is Qmin=5 (a). Determine the firm`s profit-maximizing level of output. Compute i

Economics Case Study

You are in Management for IBX Steel Components. J. D. Brotsky is a top labor leader and has just announced that her union will go on strike against management unless you grant the workers a significant pay raise. Economically, you realize that a strike might cost the company more money than the pay raise, but this might also jus

Competitive Markets

XYZ Corporation faces a horizontal demand curve and the market price is given to be $15. Total variable cost equation for XYZ Corporation is equal to: TVC = .25Q3 ââ?¬" 3Q2 +20Q where Q is quantity in thousands a) What key concept must be implemented if the firm wants to maximize profits in this market? b) Whic

Revenue and Profit for an Airline

American Airlines leases a 300-seat carrier to fly its daily Dallas-Denver route. It recently lowered its ticket price from $240 to $200, and observed the following demand for seats by business and tourist-class passengers: Price Q(business) Q(tourists) Q(total) Revenue (business) Revenue (tourists) Revenue (total) 240

Demand Curve / Marginal Products

Question 1 Big Steel Co. is a price leader in the local steel market. The other, smaller manufacturers set their price based on that established by Big Steel. The following information has been gathered by Big Steel's pricing department. Demand curve for steel is equation to Qt = 10,000 - 0.5P where Qt is the total amo

Over the past three years, the price of gasoline has ranged from $1.50 a gallon to $4.20 a gallon. To what extent, if any, are you able to change your quantity demanded for gasoline as the price goes up and down? Would the answer be different if the price went to $4.20 and stayed there for several years? What does the concept of elasticity have to do with this?

Over the past three years, the price of gasoline has ranged from $1.50 a gallon to $4.20 a gallon. To what extent, if any, are you able to change your quantity demanded for gasoline as the price goes up and down? Would the answer be different if the price went to $4.20 and stayed there for several years? What does th

Pricing and Market Power

Wet-n-Wild Indoor Water Park offers family fun year-round in the Northstar state to locals and out-of-state visitors to the nearby Mall of America. The demand for day-passes to the water park for each market segment is independent of the other market segment. The marginal cost of providing service to each visitor is $5 per day.

Average Sales and Equilibrium

Ajax, Inc. has hired you to analyze the demand for its line of telecommunications devices in 35 different market areas. The available data set includes observations on the number of thousands of units sold by Ajax per month (Qd), the price per unit charged by Ajax (PX), the average unit price of competing brands (PZ), monthly ad

Exemplify the law of demand.

In the aftermath of September 11 terrorist attacks, the quantity of sold airline tickets in 2002 fell by a large percentage when compared to 2001. During the same time period the average price for airling tickets also fell. The law of demand states that "the quantity demanded of a good varies inversely with its price. Does the

Modifying Price to Change Revenue

Some businesses will examine their pricing structure and modify it in order to maximize revenue, either by raising or lowering the price. For some organizations, lowering prices might be an effective means for increasing revenue. Select an organization you work for or are familiar with. Could the organization you have chosen low

Answers and Explanations to an Economics Quiz

See the attached file. Average Variable Costs and Marginal Costs Average variable costs are increasing when: 1. Marginal costs are increasing 2. Marginal costs are declining 3. Marginal costs exceed fixed costs 4. Marginal productivity is increasing. Demand for Steel When calculating the own price elasticity f

Assess the given demand function.

Management at the Johnston Corporation estimates a demand function for its lawnmower line to be: Qk = 5-2.4*Pb+0.7*A+0.002*I+0.8*Pv Where Qk = the quantity of lawnmowers, Pb = the own price of lawnmowers produced by Johnston ($/Unit) A = the advertising expenditures for Johnson lawnmowers ($/ad unit in a year), I = income

Implications of widgets are emphasized.

How does an increase in the price of widgets affect the: And describe the effects in detail?: a. Demand for widgets b. Supply of widgets c. Demand for woozles if widgets and woozles are substitutes d. Demand for gadgets if widgets and gadgets are complements