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Economics - 5 multiple choice problems

1. If a firm manager has a base salary of $50,000 and also gets 2% of all profits, how much will his income be if revenues are $8,000,000 and profits are $2,000,000. A. $250,000 B. $210,000 C. $90,000 D. $150,000 2. The industry elasticity of demand for telephone service is -2 while the elasticity of demand f

Pricing Strategy

Huskte and Speedy are the only 2 companies licensed to provide transportation service from the city airport to downtown. Assume that low-price guarantees are illegal. The average cost per passenger is constant $10. Here are the possible outcomes: -Price fixing cartel. Each firm has 15 passengers at a price of $30. -Duopoly (

Infant Formula industry market

Determine the market structure (competition, monopolistic competition, oligopoly, and monopoly) that best characterizes the infant formula industry. Analysis should reference the following industry characteristics: number of firms in industry, degree of product similarity, ease of entry and exit, use of non price competition, us

Economics and Management

Question #1: discuss "shut-down" condition for a competitive firm. The condition for shut-down is when P = AVC. Explain it. Does the firm make zero profit at that point or what? How different is the point vis-a-vis a break-even point in terms of profit? Question #2: Describe the major characteristics of monopolistic

Detailed Explanation of Monopolistic Competition

Industry structure is often measured by computing the Four-Firm Concentration Ratio. Suppose you have an industry with 20 firms and the CR is 30%. How would you describe this industry? Suppost the demand fo the product rises and pushed up the price for the good. What long-run adjustments would you expect following this change in

Evolution of Market Structures

The 4 types of market structures are Perfect Competition, Monopoly, Oligopoly, and Monoplistic Competition. Given the dynamics of competition, think of the various sequential paths of market structures that firms can move through over time (any of the following is possible): Monoply-->Oligopoly-->Monopolistic Competition-->Pe

Cournot Oligopoly

Cournot Oligopoly . Two firms compete on the quantity they produce of good a single com¬modity. They face a demand function p= f(x) where p is the price at which they will sell the good, which depends on the total quantity produced, x= x1 + x2 (x1 is the quantity produced by firm i = 1, 2). Let the demand be linear: p

4 economic questions...

Just answers the 4 questions below using some economic concepts. #1. Choose a real world industry and determine which of the four market structures (perfect competition, monopolistic competition, oligopoly, or monopoly) this industry is most closely related to. Be sure to support your answer by referring to the characteristi