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Output & Costs

Pure Monopoly Calculation

Use the following data for a pure monopoly to calculate the firm's: (a) total revenue, marginal revenue, marginal costs, and average total cost; (b) its profit-maximizing output level and produce price; (c) its profit. (d) Use the price-cost formula to determine whether or not the firm's operations are productively-efficient.

Manager of the only renting construction equipment in NY

As manager of the only renting construction equipment in NY, it has been observed that the demand through Thursday to Saturday in much higher that it is on Sunday through Wednesday. The demand for equipment during the weekends is: P=10-0.1 Q And the demand during the weekdays is P =25-Q What pricing strategy you suggest t

Managerial Economics

Is the following sentences true or false and why (please give mathematical or graphical explanation when needed)? 1. Empirical studies often indicate that the long- run average cost curve for PC industry is J -shaped 2. a profit- maximizing monopolist will always choose on output in the short run where the average total c

The term "diminishing returns" refers to

The .... is the increase in output obtained by hiring an additional worker. a. average product b. total product c. marginal product d. marginal cost my answer is D The term "diminishing returns" refers to a. falling interest rate that can be expected as one's investment in a single asset increases b. reduction in pro

Strategic Decision Making in Oligopoly Markets

Thomas Schelling, an expert on nuclear strategy and arms control, observed in his book The Strategy of Conflict (Cambridge, MA: Harvard University Press, 1960), "The power to constrain an adversary depends upon the power to bind oneself." Explain this statement using the concept of strategic commitment. In the 2000 US presid

The internal rate of return on a project can be found

1.The internal rate of return on a project can be found discounting all cash flows at the cost of capital averaging all cash inflows, and calculating the interest rate which will make them equal to the average investment calculating the intersest rate whuch will equate the present value of all cash inflows to t

ECON practice questions

1. Which of the following is a relevant cost? A. Replacement cost B. Sunk Cost C. Historical Cost D. Fixed Cost E. All of the above are relevant costs 2. Which of the following cost relationships is not true? A. AFC = AC - MC B. TVC = TC - TFC C. the change in TVC divided by the change in Q = MC D. The change in TC d

Average total cost is

Average total cost is a. the change in cost divided by the change in output b. total cost divided by output c. the change in output divided by the change in costs d. total cost times output my answer is A when an increase in the firm's output reduces its long run average cost, it experiences a. economic of scale b.


Your division is considering two projects with the following net cash flows: year Project A Project B 0 (25) (20) 1 5 10 2 10 9 3 17 6 a) What are the projects' NPVs,


Problem A. I am having trouble with the attached self-exercises on pages 139 through 140. Quetions 1, 2,and 9 Please help. Problem B.Please help complete problems on pages P11 and P12 Nos. 1, 2, 3, 5, 6,and 7. And please use MS Excel software to graph problems 1 and 5.

Relationship between P > AVC and a firm's contribution margin

2a) Explain the relationship between P > AVC and a firm's contribution margin, when a firms is making a decision to shut down operations. 2b) Knowing that a profit maximizing firm would follow the MR = MC rule and in case of a perfect competitor P = MC rule; If a perfectly competitive firm has the following cost f

Competitive markets

1a) What are the characteristics of a Perfectly Competitive Market? 1b) What are the Characteristics of a Monopoly? 1c) Discuss why the demand curve faced by a Perfect Competitor is assumed to be perfectly elastic and that of a Monopolist less elastic.

Cost types

Distinguish between the following types of costs: a) Historical Cost and Replacement Cost b) Opportunity cost and out-of-pocket cost c) Incremental cost and Sunk cost

Total Fixed Cost

At 6 units of output, marginal cost is $6, average variable cost is $5 and average total cost is $8. The total fixed cost at 6 units of output is?

Profit, Cost, Competition

Please see the attached file. MATCHING: Place only one letter in each space and use any one letter only once. One point each. ____ 1. Cause of increasing long-run A. Normal Profit average total costs


9. When a firm earns a normal profit, its revenue is just enough to cover both its ____________ cost and its ___________ cost. a. accounting; opportunity b. accounting; replacement c. historical; replacement d. explicit; accounting


A fashion firm makes outfits using two inputs, design skills( L) and expensive materials (M). The cost of fabrication is small and may be ignored as a first approximation. At current output levels, the unit input costs are: CL =£20 and CM =£4. The marginal products are: MPL =50: MPM =8. Is the firm operating efficiently i

Production Function (Capital/Labor) Ratio

Can you please give some hints, even if you can't help with the final solution. Thank You! Given the production function Q= 100(L^0.5)(K^0.5), where L = labor hours per unit time, K=machine hours per unit time, and Q=output per unit time. 1. If the price of capital and labor are equal, will the K/L ratio along the expansio

Allocating Production Resources at American Company

#1) An American Company that sells consumer electronics products has manufacturing facilities in Mexico, Taiwan, and Canada. The average hourly wage, output, and annual overhead cost for each site are as follows: Mexico Taiwan Canada Hourly wage rate

Average Cost

Assuming this firm is a short-run profit-maximizer or loss-minimizer. which statement best describes its present situation? See attached file for full problem description.

Pricing and Output

Suppose three firms face the same total market demand for their products. The demand is P Q $80 20,000 70 25,000 60 30,000 50 35,000 Suppose further that all three firms are selling their product for $60 and each has about one-third of the total market. One of the firms, in an attempt to gain market share at the

Marginal Cost-Revenue

In economics, when you plot cost and revenue on the Price-Quantity axis, the profit maximization condition is when marginal cost is equal to marginal revenue. This is a crucial notion to understand. Without it one can't effectively analyze profits. Does this make sense?

Maximization of Profits

It costs Dan's company C(x) = x^2 - 3x + 64 dollars to produce x items. The selling price (p) when x hundred units are produced is p(x) = (44 - x)/4. Determine the level of production (# of items produced) that maximizes profit.

Output Effect

The output effect of an increase in the wage comes about because higher wages: a) increase production costs, and final good prices will rise, reducing the quantity demanded of the product b) increase production costs, and final good prices will rise, increasing the quantity demanded of the product c) make labor less expensive