You must post a memo which you explain the factors that contribute to the elasticity of goods. You must also incorporate a real-life example of price elasticity of demand, and discuss how it impacts the economy. * Discuss in detail the influences of price elasticity of demand. * Explain the factors that contribut
You are a manager in a perfectly competitive market. The price in your market is $35. Your total cost curve is C(Q)= 10+2Q+0.5Q2. a. What level of output should you produce in the short run? b. What price should you charge in the short run? c. Will you make any profits in the short run? d. What will happen in the long run?
Mr. Smith, has fallen behind on his work, he has asked you to help prepare a letter for a local business/economic project. Your local city is trying to attract a new garbage processing facility in an underdeveloped part of town. As part of the package of incentives for luring the facility's builders, the city is offering an econ
Many economists argue that more research, development and innovation occur in the oligopolistic market structure than in any other. Why?
Suppose that the price elasticity of demand for cigarettes is 0.46 in the short run and 1.89 in the long run, the income elasticity of demand for cigarettes is 0.50, and the cross-price elasticity of demand between cigarettes and alcohol is -0.70. Suppose also that the price of cigarettes, the income of consumers, and the price
1. Illustrate the following demand on a graph: Price (per pair) $100 $80 $60 $40 $20 Quantity demanded (pairs per day) 10 14 18 22 26 (a) How many pairs will be demanded when the price is $70? (b) How much money will be spent on shoes at a price of (i) $50 (ii) $90 3. According to the News stori
Suppose that the price elasticity of demand for cigarettes is 0.46 in the short-run and 1.89 in the long-run, the income elasticity of demand for cigarettes is 0.50, and the cross-price elasticity of demand between cigarettes and alcohol is -0.70. Suppose also that the price of cigarettes, the income of consumers, and the price
Explain why a firm in a perfectly competitive market would choose to remain in business, if its profit is zero at equilibrium. Illustrate any theories or concept you decide to use to answer this question with numerical examples. The analysis of zero profit conditions showed that firms might remain in business for a time des
In real life scenarios, when firms face profit maximizing decisions in the short and long runs, how often are they able to obtain information that is updated enough, and accurate enough for their profit maximizing decision to be the "best" decision for the allocation of the firms resources?
The El Dorado Star is the only newspaper in El Dorado, New Mexico. Certainly, the competes with The Wall Street Journal, USA Today, and The New York Times for national news reporting, but the Star offers readers stories of local interest, such as local news, weather, sporting events, and so on. The El Dorado Star faces the rev
If the Federal Reserve were to sell bonds, what would likely happen to the money supply and interest rates? Carefully Explain (the money market graph would help). Using the AS/AD model what do you predict will happen to the level of Real GDP and the Price level in the U.S. in the Short-Run and Long-Run? Carefully Explain (a g
Suppose the economy is currently at potential output and the inflation rate is 8%. Suppose the federal funds rate is currently 3% a. The board of governors meets to set a new target federal funds rate. Would you expect it to be 2% or 4%? b. How would you expect the Fed to reach the new target? c. What impact would this h
Please see the attached file.
Refer to the attachment for a perfectly competitive firm This firm should shutdown at any price below: a) $4 b) $10 c) $15 d) $23 e) $5
A firm has the following short-run demand and cost schedule for a particular product: Q=100+2P and Total Cost (TC)=200+2Q. a. Determine the firm's profit-maximizing Quantity Q, Price P, and economic profits or losses. b. If this firm operates in a monopolistically competitive market, what will happen in the long-run to Q
Please see the attached file. 2) The initial price of a cup of coffee is $1, and at that price, 400 cups are demanded. If the price falls to $0.90, the quantity demanded will increase to 500. a. Calculate the (arc) price elasticity of demand for coffee. b. Based on your answer, is the demand for coffee elastic or inelasti
Both traditional & new Keynesian theory indicate that the short run aggregate supply is horizontal. a) in terms of their short run implications for the price level & real GDP, is there any difference between the two approaches? Same short run implications Different short run implications b)In the terms of the
True or False? Please explain your reasoning. a. The short-run average total cost can never be less than the long-run average total cost. b. The short-run average variable cost can never be less than the long-run average total cost. c. In the long run, choosing a higher level of fixed cost shifts the long-run average total
1. If nothing else changes, an increase in fixed cost will A.decrease the break-even quantity point B.increase the break-even quantity point C.will have no effect on the break-even point D.may either increase or decrease the break-even point 2. The degree of operating leverage can be defined as A.the change in profit for
You read a story in the newspaper about the "economy of mass production". This means that a. total cost is less a larger levels of production b. long run average costs is less at larger levels of production c. marginal cost is less at larger levels of production d. fixed cost is less at larger levels of production
3) A firm has the following short-run demand and cost schedule for a particular product: Q = 200 - 5P TC = 400 + 4Q 3a) At what price should this firm sell its product? 3b) Determine the total profit/loss this firm would make 3c) If this is a monopolistically
Assume you own a machine tool manufacturing company that produces one standardized type of tool. Your total costs change as shown in the table below: Costs of machine tool manufacturer (1) Quantity (thousands of machine tools per day) (2) Total Cost (TC) (thousands of dollars per day) (3) Average Cost (ATC) (dollar
In the short run, shouldn't one produce as long as fixed costs are being covered? I'm confused on this. WHich costs should you be concerned with for the short run? fixed, total, average variable, overhead, average fixed? there are so many.
11. How long is the "short-run" time period in the economic analysis of the market? a. three months or one business quarter b. total time in which sellers already in the market respond to changes in demand and equilibrium price c. total amount of time it takes new sellers to enter the market d. total
Suppose, after graduation, you take a job in a factory in Chile that produces faux leather shoes. One day, your boss comes in and says, "this factory isn't operating at a profit and so we can minimize our losses by closing up shop." Yikes! You didn't think you'd lose your job that quickly. Your boss continues talking and states
As a kid, you recorded the costs of your Kool-Aid stand and drew your long-run average-cost curve. Now you work in a video chip factory. Would you expect any similarities IN SHAPE between the kool-aid cost curve and the long-run average cost curve for the chip factory? Would you expect any differences? Question requires specific
Suppose, after graduation, you take a job in a factory in Chile that produces faux leather shoes. One day, your boss comes in and says, "this factory isn't operating at a profit and so we can minimize our losses by closing up shop." Yikes! You didn't think you'd lose your job that quickly. Your boss continues talking and states
Will a firm shut down in the short run if it is losing money, even though it can cover its fixed costs? Explain why this is true or false and include graph(s).
A firm has the following short run demand and cost schedule for a particular product Q = 200 - 5P TC = 400 + 4Q a. At what price should this firm sell its product? b. If this is a monopolistically competitive firm, what do you think would start to happen in the long run? Explain c. Suppose in the long run, the dema
It has been said that, "In the long run, all costs are variable." If this is the case, how can production be studied by dividing costs into fixed and variable components? MBA