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Demand & Supply

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

AD Logic

Which of the following changes to fiscal stimulus package of 2009 for $862 billion (under the bill called American Recovery and Reinvestment Act of 2009) would have a larger overall impact on AD? Explain your answer with credible logic and analysis. A) A program of tax rebates, distributed u

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?

A restaurant's two demands

QL = 25PL-3 and Qd = 30Pd-2 where the subscripts "L" and "d" stand for lunch and dinner respectively. Suppose the marginal cost of a lunch equals the marginal cost of a dinner and equals $20. How much should the restaurant charge for lunch, and how much for dinner?

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

Price Elasticity of Demand and Increasing Profits

A company currently sells 60,000 units a month at $10 per unit. The marginal cost per unit is $6. The company is considering raising the price by 10% to $11. If the price elasticity of demand is _______________ in that price range, then profits would increase if the company decided to raise the price by 10%. a) equal to -3 b

Increasing Profits with a Price Elasticity of Demand

A company currently sells 60,000 units a month at $10 per unit. The marginal cost per unit is $6. The company is considering raising the price by 10% to $11. If the price elasticity of demand is _______________ in that price range, then profits would increase if the company decided to raise the price by 10%.

University students living in dormitories

In a practical sense, write your opinions on the effect a rule stating that university students must live in university dormitories would have on the price elasticity of demand for dormitory space. What impact might this in turn have on room rates and attending university if at all?

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

Calculating the equilibrium parameters

Initial demand for bottled water in a country is : QD0=300-200p. The supply of bottled water id : Qs=-100+600p. Q is in gallons per day, and p is dollars per gallon. A hurricane hits and demand for bottled water increases to QD'=500-200p. Which policy is in the best interest of consumers as a group 1. Setting a price ceil

Principles of Supply and Demand

Using the principles of supply and demand, develop a plan to alleviate the shortage of Math and Science teachers within this country. Try to use price and non-price determinants as your tools to reach equilibrium. Defend your position using economic principles.

Supply and Demand..

Qd= 317500-10000P Qs= 2500+7500P Q is pounds of scrap and P is in cents 15cents 16 cents 17 cents 18 cents 19 cents 20 cents Need to complete the following for each Price Price(1) Qs(2) Qd (3) surplus (+) or Shortage) (4=2-3) 15 16 17 18 19 20

Inferior Good Explained

The average 15-year old purchases 12 CDs and 15 cheese pizzas in a typical year. If cheese pizzas are inferior goods, would the average 15-year old be indifferent between receiving a $30 gift certificate at a local music store and $30 in cash? Explain.

Pricing Policy

The total operating revenues of a public transportation authority are $100 million while its total operating costs are $120 million. The price of a ride is $1, and the price elasticity of demand for public transportation has been estimated to be -0.4. By law, the public transportation authority must take steps to eliminate its

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

Inelastic or elastic , why?

For each of the following goods, indicate whether you expect demand to be inelastic or elastic, and explain why. What would cause the elasticity to change in the future? (a) Opera: (b) Foreign travel: (c) Local telephone service: (d) DVD rentals: (e) Eggs (f) Iphone

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

Price Elasticity of Demand for School Lunches

Where Q=number of lunches served and P=price n cents. Compute the point elasticity of demand for school lunches at a price of 40 cents per lunch. a = -1.78 b= -.078 c = -262.7 d = 1.78