The current interest rate on new debt is9%. The firm's marginal tax rate is 40%. It's capital structure, considered to be optimal, is as follows: Debt $104,000,000 Common equity $156,000,000 Total liabilities and equity $260,000,000 A.
1. How can real GDP per person be higher in one country than in another even if the first country has lower aggregate reeal GDP than the second? 2. Under what circumstances might a significant rise in nominal GDP per person lead to a widespread of reduction in overall life satisfaction, after taking into account marital hap
Question: You have opened your own word-processing service. You bought a personal computer, and paid $5, 000 for it. However, due to the cost changes in the computer industry, the current price of an equivalent machine is $2,500. You could sell any used machine for $1,000. If you were not word processing, you could earn $20,00
1. When the CR = 80%, is the market efficient when the market behavior follows the price leadership model? 2. When the CR=80%, is the market efficient when the market behavior follows the contestable markets model? Price leadership -setting a price w/the expectation that the other firms match the leader's price cont
Wilbur and Orville are in a dispute. Orville would like to fly his planes while Wilbur does not want to have the value of his house decreased due to the noise. Use the information in the table to help them solve the problem. # of Flights Total Profits Marginal Profits Value of Wilbur's House 1 $1000
For each of the following cost-output relationships, describe the shape (U-shape, decreasing, increasing, constant) of the average total cost and marginal cost functions (C = total cost, Q = output): (1) C = 42,500,000 + 2550Q (2) C = 8.48 + 0.65Q + .00220Q2
What are some facors that give rise to economies of scale? and Diseconomies?
Zinger Company makes and sells a sewing machine line. manufactures and sells a line of sewing machines. Demand (Q) is represented by the equation below: Q = 400 - .5P P = price. The total cost of making Q units/period are represented by: TC = 20,000 + 50Q + 3Q2. What is the expression for total profits in term
I need help in calcuating for Weighted average cost of capital. The question go Suppose that George Industries has a cost of equity of 14%, no preferred stock and a cost of debt of 9%. If the target debt/equity ratio is 75% and the tax rate is 34%, what is Dugan 's weighted average cost of capital(WAAC)?
Given the following production function ,where x is an input and Q is output.Output sells for $10.00 per unit and inputs (X) are $20.00 per unit.Dtermine the optimal amount of input (X) to use in order to maximize profit.Q=10-.25X^2
1. When SRAC is declining, the firm experiences economies of scale. True False 2. A monopoly firm is a price taker. True False 3. Which of the following statements is NOT true? MC is a change of TC MC of labor is wage rate. A MC curve cuts through the minim
Factors to be considered to create a team-based, empowered organization
M is a monopolist selling goods G. M's cost function is c(y)=4y where y is the total production of G. Some of M's potential customers are members and get a member magazine with coupons. Member demand curve: X1(p, C)=42-(p-C) where X1(p, C) is member demand, p-C is the price they actually pay, p the official price, and C is price
Answer to question from Michael Parkin Economics Text 7e. (attached)
How can you justify the existence of government-granted monopolies for such public utilities as local telephone service, natural gas distribution, and electricity in the light of the traditional economic argument that the more competition there is, the more likely it is that an efficient allocation of resources will occur?
In problem 4, Sue's surfboard buys a second plant and the total quantity of each quantity of labor increases by 50%. The total fixed cost of operating each plant is $200.00 a week. The wage rate is $100.00 a week. a. Set out the average total cost curve when Sue's surfboards operates two plants. b. Draw the long-run average
Just prior to the last round of negotiations with the Major League Player's Association, baseball commissioner Bud Selig broke open the books to show that major league baseball (MLB) had lost $1.4 billion during the previous 5 years. Worse yet, operating losses of more than $500 million per year on stagnant revenues of $3.
1)a. Based on the following table, what is the profit maximizing output? Output Price Total Costs 0 $ 10 $ 31 1 10 40 2 10 45 3 10 48 4 10 55 5 10 65 6 10 80 7 10 100 8 10 140 9 10 220 10 10 340 b). How would your answer change if, in response to an increase in demand, the price of the good increased to
Four people: Person A whose profit is 84X-6X^2 Person B whose profit is $30-6X Person C whose profit is $75-10X Person D whose profit is $100-8X Person A has property rights, meaning they can set the value of X from 0 to 8. Each person must have the same cost of negotiation with each other. What is the minimum per perso
1. Provide an example of a monopoly, an oligopoly, and a cartel. 2. Discuss the welfare effects of monopolies and oligopolies. 3. Which actions you think OPEC will take over the next year?
Calculate the total change in a year's GDP: Tone Artists, Inc. produces 100,000 new White Snake CD's that it prices at $15 a piece. Ten thousand CDs are sold abroad, but alas, the rest remain unsold on warehouse shelves.
Not sure how to apply the following proposed society's possibility curve to study questions. Output (per year) Possibility Food(millions of tons) Tractors(millions) A 0 30
Assume a firm is operating in a perfectly competitive product market where the price of its output can be sold at a price p=$10. The firm can hire any number of workers at a wage of W=$50. The total product (or short-run production function) is given by Q=100*L-2.5*Lsquared, and the marginal product of labor curve is MPL=100-5*L
1. (a) Using calculus, derive the relationship between a monopolist's marginal revenue, the monopolists' price, and the price elasticity of demand. (b) Consider a monopolist who produces output at a constant marginal and average cost of $12. The price elasticity for the monopolist's product is 3. Use your answer to (a) to find
A firm fixed cost are 0 outputs and its aveage total cost producing different output levels are summarized in the table below..... Complete the table to find the fixed cost, variable cost, total cost, average fixed cost and average variable cost and marginal cost. Q FC VC TC AFC AVC
Still dont know how to do this type of problem...... An industry consists of three firms with sales of $200,000, $500,000, $400,000. a. Calculate the Herfindal-Hirschmann index (HHI) b. Calculate the four-firm ratio. (C^4) c. Based on the US Dept. of Justic Mergers Guidelines do you think the dept would block the merger
A major car company (from Japan), announced a major restructuring plan. to attempt to reverse its 6 percent decline in sales. the company's North American sales were hard hit, where a 29 percent drop in sales. This because of bad loans and financing with banks. In Japan, sales dropped a 56 percent, due to recalls and attempts
A firm has $1 Million in Sales, a Lerner Index of 0.65 and a marginal cost of $35 and competes against 1,000 other firms in its relevant market. a. What price does the firm charge it customers? Show formula to explain how do this. b. By what factor does this firm mark up its price over marginal cost? c. Do you thinkthis fir
1. Consider the attached graph. Suppose that Sony Company and American Company jointly form a new firm, Venture Company, whose ball bearings replace the output sold by the parents in the domestic market. Assuming that Venture Company operates as a monopoly and that its costs equal MC0=AC0, what would be the firm's price, output,
(See attached file for full problem description with diagram) --- Exhibit 1 shows a firm in a price-taker market. Use the diagram to answer the following questions. a. Market Price = $20. If this firm wants to maximize its profits, how many units, Q, should it produce? Be careful, there is a trick in the graph! b. What w