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    Short- and Long-Run Cost Functions

    Price Discrimination

    Some charge that third degree price discrimination is unfair or that it reduces social welfare. Why does charging one group a lower price hurt anyone? Please explain. b. McDonald's charges a higher price for a Big Mac in New York City than it does in a small town in Iowa. Is this an example of third degree price discrimin

    Value of Marginal Productivity

    Assume a firm employs 10 workers and pays each $15 per hour. Further assume that the MP of the 10th worker is 5 unit of output and that the price of the output is $4. In the short run should the firm a. Hire additional workers b. Reduced the amount of workers employed c. Continue to employ 10 workers

    PERMANENT INCOME HYPOTHESEIS (PIH)

    Please help with the following problem. In mid-1968, the government imposed a 10% income tax surcharge on personal and corporate income to pay for the costs of the Vietnam War. It was widely believed that the surcharge was temporary, and in fact it was removed in mid-1970. Based on the permanent income hypothesis, what would

    Mergers

    Suppose that Panasonic Electronics (maker of phones) and MCI (long distance telephone services) decide to merge. What argument would tell the United States Justice Department that it may be socially beneficial for the merger to take place?

    Market power, price discrimination

    Airline flies only one route. Demand for each flight is Q=500-P. Cost of running each flight is $30,000 plus $100 per passenger. a. What is the profit maxmizing price the airline will charge. b. How many people will be on each flight. c. What is the profit for each flight. d. If fixed cost is $41000 instead of $30,000, wil

    Short and Long Run Costs and Concept of Diminishing Returns

    (Revised) Please be specific and detailed in answering each of the discussion questions below. (Note: Number of pages to answer all questions, if required, should be no more than 7 pages) Finally, please list my questions before each of your detailed responses so I can follow along with clarity. 1. Discuss in detail wh

    Cost Curves: Example Problem

    A firm's cost C is given in series as a function of output q=0,1,2,3,4,5,6,7,8,9,10 as C=50, 100, 140,170,190,210,230,260,300,350,410. Construct a table containing the above information and Total Variable Cost, Average Total Cost, Average Variable Cost and Marginal Cost. At price of 35, how many units will be produced in t

    Long run & short run costs

    Can you help me with this study question? If you own a home remodeling company. You are currently earning short-run profits. This industry is an increasing-cost industry. What do you feel will happen in the long-run to your firm's cost of production & why. What about the price you can charge for your remodeling services an

    Marginal Product, Cost

    If a company's only variable input is labor and 50 workers are used, the average product of labor is 50, the marginal product of labor is 75, the wage rate is $80 and the total cost of fixed input is $500, which is true? Average variable cost is rising marginal cost is rising average variable is lowering you can not

    Short-run and Long-run weak demand

    When demand is weak, the firm will have the option of shutting down in the short run. But what condition must be met for it to make sense for the firm to shut down? If this condition was met, how would the firm benefit by shutting down? Furthermore, what if the weak demand continued in the long run? What do you change about the

    Elasticity

    Please let me know if I did this correctly. Assignments: Elasticity As the Midwest regional manager for American Airlines, you have recently undertaken a survey of economy-class load factors (the percentage of economy-class seats that are filled with paying customers) on the Chicago-Columbus, Ohio route that you service

    Elasticity of Demand for Drugs

    Subject: Price theory Details: Consider the elasticity of demand for drugs. How does it affect the terms of this trade-off (talking about short run and long run gains from patents)? Can you explain why, if the elasticity of demand is low, the short-run allocative distortion associated with patent protection?the ?welfare burden

    Shut-down, Profit maximizing, Zero-Profit Points

    See attachment for question. Which of the following statements is correct in reference to the figure below? A) B is the shutdown point B) B is the profit-maximizing Point C) is the zero-profit point. D) A is the shutdown point E) C is the shutdown point

    Financial Management

    All of the following statements are correct EXCEPT: (a) The short-run price needs to cover only the costs that vary in the short run. (b) The short-run price needs to cover both variable and fixed costs. (c) The long-run price needs to cover both fixed and variable costs. (d) Incremental costs are relevant costs in the

    Micro Economics: analysis of price elasticity (short and long run)

    Please explain whether the following goods or services are price elastic or inelastic in both the short run and long run. a. Gasoline b. Texaco gasoline c. Salt d. Large screen TV e. Cosmetic surgery f. Lasik eye surgery g. A product or service from your organization

    Profit Maximization

    Please be as specific as possible and break-down answers in simple steps. 1. A monopolistically competitive firm faces a demand curve given by p=475 - 11q. It has a total cost curve given by LTC=500q - 21q2 + q3. The firm's long run average and marginal cost curves are LAC=500 - 21q + q2 and LMC=500 - 42q + 3q2. The slope