A firm has a cost function given by the following: c(w1, w2, y)= w1w2y^2/(w1+w2) where the wi's are the prices of the factors (inputs) x1 and x2 respectively, and y is output. a) Is this a legitimate cost function? b) Find the firm's production function, y= f(x1, x2). c) From the cost function derive the firm's
The Ali Baba Co., is the only supplier of a particular type of Oriental carpet. The estimated demand for its carpets is Q= 112,000 - 500P + 5M Where Q = number of carpets, P = price of carpets (dollars per unit), and M = consumers' income per capita. The estimate average variable cost function for Ali Baba's carpets is AVC
Economics: Given the demand for and the supply of a commodity that you yourself consume on a regular basis, i.e., I might choose coffee, what price will be the equilibrium price of this commodity?
1. Given the demand for and the supply of a commodity that you yourself consume on a regular basis, i.e., I might choose coffee, what price will be the equilibrium price of this commodity? Explain why this price will tend to prevail in the market and why higher (lower) prices, if the do exist temporarily, will tend to fal
Organization/Industry Overview - OPEC Organization of the Petroleum Exporting Countries operates in.
I have the following task, and I need some help getting started: Write a 400 word summary in which the market in which OPEC Organization of the Petroleum Exporting Countries operates in.
1.The demand for erasers (Q) is given as follows: Q = 240 - 4Pe + 2M + 1Pb + 1A , where Pe is the price of erasers, M is the level of income, Pb is the price of another (related) good, A is the level of advertising. Suppose that Pe = 10, Pb = 10, A = 10, and M = 20. a. What is the price elasticity of demand of erasers?
Is the agricultural industry perfectly competitive? Use economic rationale to explain why or why not?
Problems: 1. Explain how opportunity cost is related to the producer's supply curve. 2. Explain why the minimum price necessary rises as the producer produces more output. 3. Define profit. 4. What are the assumptions of a perfectly competitive market. 5. Describe the demand curve faced by the individual firm. D
Please discuss the price elasticity of demand and productivity (considering the law of diminishing return) for Pepsi.
Pricing and Profits: Suppose a manager of a profitable department store you are confronted with a pricing problem. You have two types of customers: a high-end type that are willing to pay a price of $20 for a pair of Levis Jeans, and a low-end type customer that are willing to pay a price of $13 for the same pair of jeans. Your supplier provided you with the jeans at $10 each and your extra costs are calculated at $1 per jeans. Your survey of your customers for jeans tells you that 50% of your customers are of the high end type and 50% are of the low end type. 1. If you decided to price high, what would be your expected profits per unit? 2. If you decided to price low, what would be your expected profits per unit? 3. Suppose your store attracts 1000 customers for these jeans: will you price high or low? And why?
Suppose a manager of a profitable department store you are confronted with a pricing problem. You have two types of customers: a high-end type that are willing to pay a price of $20 for a pair of Levis Jeans, and a low-end type customer that are willing to pay a price of $13 for the same pair of jeans. Your supplier provided y
Suppose gasoline and hybrid vehicles are substitutes. On the back, draw a graph indicating what will happen in the market for hybrid vehicles if the price of gasoline increases. Be sure to label your graph carefully, putting Price on the vertical axis and Quantity on the horizontal axis. You do not need to have actual numbers
Suppose the demand for guitars in State College is given by Qd = 9000 - 12P where Qd is the quantity demanded, and P is the price of guitars. Also, suppose the supply of guitars is given by Qs = 9P - 3852, where Qs is the quantity supplied of guitars. a)Calculate the equilibrium price of guitars and the equilibrium quantity
I have read the material for Chapter 3: "Supply and Demand" located in Michael Parkin's book titled, "Economics" (8th ed.). From my readings, I understand that as the prices rises supply increases. I also understand that as demand increases supply increases. However, I have trouble understanding the concepts concerning equilibri
For each of the following changes, show the effect on the supply curve, and state what will happen to market equilibrium price and quantity in the short run. a. The government requires pollution control filters that raise production costs. b. Wages of workers in this industry fall. c. There is an improvement in technology
The following relations describe monthly demand and supply for a computer support service catering to small businesses: Qd=3,000 -10 P Qs=-1,000+ 10P where Q is the number of businesses that need services and P is the monthly fee, in dollars. a) At what average monthly fee would demand equal zero? b) At what av
Joy's frozen yogurt shops have enjoyed rapid growth in northeastern states in recent years. From the analysis of joy's various outlets, it was found that the demand curve follows this pattern. Q=200-300P+120 I +65T-250Ac+400 Aj Q= number of cups served I= per capita income T= average outdoor temperature Ac= competition's m
Several theories of direct investment highlight firm-- specific and/or home-country-specific advantages that enable a multinational corporation (MNC) to compete against host-country firms that typically are more familiar with the local business environment and do not have high costs associated with operating a project or subsidi
Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX? Compute the number of units and the price at which those units will be exchanged when there is an $8 per unit price floor.
1. Suppose the government wishes to spur the production of soybeans for their potential usage in making biodiesel in order to reduce our dependence on foreign oil. Further suppose that the market demand and supply for soybean oil are given by QD = 100 - P and QS = 50 + .3P, where Q = barrels of soybean oil, and P = price per ba
Assume that the perfectly competitive widget industry consist of exactly 1,000 firms and is initially in a long run equilibrium. Assume that the widget industry is a constant cost industry and, for simplicity, assume that there is only one plant size available. Subsequently, a permanent increase in price of a gadget (a substitut
Suppose the demand function of a firm is given by Q + P - 200 = 0 and the cost function is given by TC = 12 + 3Q, where P is the price of the good and Q is the quantity produced. Find the largest quantity the firm can produce consistent with: i)breaking even: ii)making profits of 9232: iii)making a loss of 245.
The market for paper in a particular region in the U.S. is characterized by the following demand and supply functions
4. The market for paper in a particular region in the U.S. is characterized by the following demand and supply functions: P = 80 - 0.0005 QD P = -20 + 0.0005 QS where QD is the quantity demanded of paper in 100 pound (lb.) lots, QS is the quantity supplied of paper in 100 pound (lb.) lots, and P is
The Hanover Manufacturing Company believes that the demand curve for the product is: P= 5-Q, where P is the price of its product (in dollars) and Q is the number of millions of units of its product sold per day. It is currently charging a price of $1 per unit for its product. A. Evaluate the wisdom of the firm's pricing polic
You are the manager of a firm that manufactures front and rear windshields for the automobile industry.
You are the manager of a firm that manufactures front and rear windshields for the automobile industry. Due to economies of scale in the industry, entry by new firms is not profitable. DaimlerChrysler has asked your company and your only rival to simultaneously submit a price quote for supplying 100,000 front and rear windshield
Assume that you are the sales manager for GM or Ford cars. How would you make the demand for GM and Ford cars shift to the right (demand increase) and inelastic so that more buyers purchase them? Explain in detail.
I am having trouble answering the following questions to the problem below. I am required to: (1) Analyze the problem using a decision tree, and (2) Determine the Maximin Alternative (Prob. 3: Decision Analysis) A firm must decide whether to construct a small, medium, or large stamping plant. A consultant's report i
If the demand for farm products were elastic rather than inelastic, would the good/bad paradox still exist?
If the demand for farm products were elastic rather than inelastic, would the good/bad paradox still exist? Why or why not.
Need some assistance in summarizing the content of this simulation according to the following questions: (at least 700 words) 1. What are the advantages and limitations of supply and demand identified in the simulation 2. Select an organization and identify the market structure for the organization. 3. Analyze how or
Need assistance in determining the best pricing strategy by answering the attached questions 1-7 based on the spreadsheet provided. 1. Include an assessment of whether the current fare maximizes profits. If not, identify the fare that should be charged. Give evidence that it is the best by showing that profits are highest if
1. Two partners who owns IT Business Solutions, a company supplying specialist software, operate out of an office in Fourways, Johannesburg but have discovered a vacant office building close to Sandton City. One of the partners favours moving to the new location because she believes the additional business gained by moving will
Could you identify and describe the concepts of scarcity and opportunity costs. Also, explain the laws of supply and demand and how they are related to the concepts of scarcity and opportunity costs in decision-making. Finally give me something other then a text book definition on market equilibrium and explain how it is determi