Here is the problem: Last week, Archie Bunker's offered a 25 cent coupon on 12-packs of Diet Cola, regularly priced at $4. Coupons were used on 40% of all purchases, and resulted in an increase from 400 to 490 cases sold per week. I know that to find Ep = % change in qty / % change in price, and the equation for optimal ma
In qualitative terms, discuss how G's potential entry into the market would affect the market demand curve for cures for the common cold and A's (firm-specific) demand curve for T. Please see attachment. Thanks
Question 1 Bill is evaluating 2 mutually exclusive pollution devices. The real discount rate is 5%. The cash flows for each device are as follows Time Device A Device B 0 (100,000) (200,000) 1 (5,000) (3,500) 2 (5,000) (3,500) 3 (5,000) (3,500) 4 (3,500) 5 (3,500) 6 (3,500) a) Compute the cost of each machine
Here is an example of some of the problems I am having difficulty with. (This is not an actual homework problem, but understanding the concept of this example would help me to do the rest of them correctly). A monopolist with a straight-line demand curve finds that it can sell 2 units at $12.00 each or 12 units at $2.00 each.
company maufactures three products: A, B and C. The company currently has an order for three units of product A, 7 units of product B, and 4 units of product C. There is no inventory for any of these products. All three products require special processing that can be done on one of two machines. The cost of producing each produ
Need help with an assessment of whether the current fare maximizes profits My instincts say no. If not, need help identifing the fare that should be charged. Looking for evidence that it is the best fare by showing that profits are highest if this fare is charged. Notes: Comment on the suggestion that the company could
The optimum market quantitiy in a competitive market if: P=100-.5q MR = 100-q Ac= 10$ per unit Is this the way you calculate it? If not, how do you do it? Profit =MC=MR 10 = 100-q 90 = q How do you then calculate the quantity brought to market by a monopolist?
Question 1 You are considering an investment in a project with a life of eight years, an initial outlay of $120,000 and annual after-tax cash flows of $52,000. The project also requires an increase in inventories of $22,000. This $22,000 investment in inventories is required at the outset of the project and will be released wh
Study of 60 firms AVC = 1.24 + .0033Q + .0000030Q^2 - .000045QZ + .00020Z^2 Q Output Z Plant Size If Z = 150; 1. Determine the short run average variable cost and the marginal cost functions. 2. Determine the output level that minimizes short run average variable costs 3. Determine the SRAVC and marginal cost
I would really apriciate it if you could explain the answer in a detailed way with graphs.Thank you. Firms in pure competition take the market price as given and produce the level of output which will maximize their profits.This quantity can be determined graphically by using either the total revenue, total cost approach or
1) Suppose you know the average total cost and the average variable cost for a given level of output, Q. Which of the following costs can you NOT determine given this information? a) Total cost b) Average fixed cost c) Fixed cost d) Variable cost e) You can determine all of the above costs given the information provided
What is a profit/price trade-off curve and how does it relate to moving from a competitive industry to a monopoly industry?
What relationship, if any, can you detect between the fact that the farmer's fixed costs of production are large, and the fact that the supply of most agricultural products is generally inelastic? Be specific in your answer.
Your company currently using an inspection process in its materials receiving department is trying to initiate an overall cost reduction program. One possible reduction is the elimination of one of the inspection positions. This position tests materials that have a defective content on the average of 0.04. By inspecting all item
A firm produces a product in a competitive industry and has a total cost function C = 50 + 4q + 2q(squared) and a marginal cost function MC = 4 + 4q. At the given market price of $20, the firm is producing 5 units of output. Is the firm maximizing its profit? What quantity of output should the firm produce in the long run?
Suppose that a competitive firm's marginal cost of producing output q is given by MC(q)=3+2q. Assume that the market price of the firm's product is $9. a. What level of output will the firm produce? b. What is the firm's producer surplus? c. Suppose that the average variable cost of the firm is given by AVC(q)=3+q. Sup
See the attached file. From Figure 1, a monopsonist's supply curve is the same as the market supply curve, and the marginal revenue product curve of team owners, the extra revenue generated by an additional worker, is represented by MRP. The marginal cost curve facing the team owners, is MC. The marginal cost curve is greater
1. Lease or Buy. Your company wants to purchase a new network file server for its wide-area computer network. The server costs $75,000. It will be completely obsolete in three years. Your options are to borrow the money at 10 percent or to lease the machine. If you lease, the payments will be $27,000 per year, payable at the en
Just answers the 4 questions below using some economic concepts. 1.) give an example that depicts the law of diminishing marginal returns. Please do not use the example for the questions below, use something else. 2.)Please give comment and what you think??? I am going to use labor examples from my old profession. I owne
A firm has a technology described by the production function: q = 2.5 L1/4K1/2 where L is the number of labor units per period and K is the number of square feet of floor space and machines per period, and q represents firm output. The firm faces the following output and input prices on the market, and these are f
Define the different degrees of price discrimination. Provide one real world example for each.
Discuss the costs and benefits of specialized task assignment relative to broad task assignment. What variables are likely to be particularly important in determining the optimal choice between these two alternatives?
I. What assumption gives rise to a U-shaped long run average cost curve for the firm? (Describe shortly) II.What ways firms in on oligopoly try to elminate or control the consequences of this charcteristic?
(i) Suppose a firm's short-run average cost curve is U shaped: what does this imply about the marginal return to the variable input? (ii) Comment on the following statement: "Average cost includes both fixed and variable costs, whereas marginal cost only includes variable costs. Therefore, marginal cost is never greater than ave
A monopolist with a straight-line demand curve finds that it can sell two units at $12 each or 12 units at $2 each. Its fixed cost is $20 and its marginal cost is constant at $3 per unit. a. Draw the MC(marginal cost), ATC (average-total-cost), MR (marginal revenue), and demand curves for this monopolist. b. At what output
A pair of shoes that wholesales for $28.79 has the following costs: Manufacturing Labor 2.25 Materials 4.95 Factory overhead, operating expense 8.5 Sales costs 4.5 Advertising 2.93 Research & Development 2 Interest 0.33 Net Income 3.33 Which are variable, and which are fixed? If ou
Output= 2000 unit Total Fixed Cost= $4000 Price of Labor= $80 price of Capital= $320 Marginal Product of Labor= 20 Marginal Product of Capital= 80 Price of output= $8 Long Run Marginal Cost= $8 Average Product of labor= 40 What Advice should be given for Short run and Long run and why? If output rises $10 do
Suppose an oligopolistic firm has the following cost and revenue data. MR Q P TR TVC AVC AFC SMC 0 120 0 0 --- --- 10 115 1150 600 60 20 110 2200 40 30 105 3150 900 40 100 4000 1120 50 95 4750 30 60 90 5400 40 70 85 5950 50 8.57 80 80 6400 4800
Bonco, Incorporated: A Firm in Transition Bonco, Incorporated, produces a patented surgical device known as the incis-a-matic. The device has been sold successfully in the U.S. market, but it has been produced in two of the company's outdated plants, in Columbus, Ohio, and in Cincinnati, Ohio. Barry Cosgrove, a young econ
The MRP of an input is... a) the selling price of the last unit of OUTPUT b) the increment of total revenue resulting from the use of an additional unit of input. c) used in determining marginal product d) harder to determine in pure competition than in monopoly e) harder to determine in pure competition than in o