Q: Both airlines and supermarkets offer customer loyalty programs. However, airline frequent flyer…
A: Since you have posted multiple subparts, as per the guidelines we can solve only first 3 subparts…
Q: ordan usually pays a price between $14 and $20 per kilogram of sugar. His monthly total expenditure…
A: Elasticity refers to the degree of responsiveness of quantity demanded or quantity supplied to one…
Q: A client must receive a minimum distribution from his IRA account. The value of the account at the…
A: The value of the account at the beginning of the current year =$53,000. His spouse, age = 63 The…
Q: The diagram to the right illustrates the market for outdoor concert tickets in a park in the middle…
A: A cost or benefit that an individual or community experiences but has no control over is referred to…
Q: What kind of externality is in the market above? a. negative consumption externality b. positive…
A: An externality refers to an indirect cost or benefit to an uninvolved 3rd party that arises as an…
Q: A consumer of three goods with wealth 10 chooses the bundle x = (2,3,0) when prices are p = (2,2,3),…
A: WARP sates that the consumer's preferences are consistent. Which means that if consumer prefers the…
Q: Calculate the economic profit at the profit-maximizing quantity you identified in part (a). Show…
A: An economic profit or loss is the difference between the revenue gained from the sale of an output…
Q: 2-42 A new integrated computer system is to be installed worldwide for a major corporation. Bids on…
A: When attempting to acquire a piece of property or engage in a procurement competition, an investor,…
Q: Given that the market price of a product A is $8, there are 20 consumers who are each willing to pay…
A: The consumer surplus is the difference between the maximum willingness to pay for good and actual…
Q: Can you explain the Pareto principle
A: There are many economic models that helps in understanding the factors and their behavior in the…
Q: A student decides to save money for a trip to Uluru. She opens a savings account with $300, and sets…
A: A.) The rate of growth of money is the component of the equation that is incorrect; it should not…
Q: Suppose the fridge daily cost function produced at Friga's Frigid Fridges is represented by the…
A: C(x) = x32000-x250+50x + 20000
Q: The axes below are for showing the Phillips curve model. The Phillips curve shows the trade off…
A: The Phillips curve illustrates how unemployment and inflation are inversely correlated. According to…
Q: If the government subsidizes vaccination against influenza to internalize the externality, should it…
A: We have given the market with externality such that it has social MB more than the Private MB.
Q: Suppose that Lindsay takes out a loan from the Bank of Free Lending. During the life of the loan,…
A: Unexpected inflation refers to the inflation experienced that is below or above that was expected.…
Q: Thermal Systems, a company that specializes in odor control for wastewater treatment plants, made…
A: Time value of money means that the same amount of money is worth more in present than in future due…
Q: A sum of P5,000 is invested now and left for eight years, at which time the principal is withdrawn.…
A: Introduction: It is given that P5000 was invested for the period of 8 years and in the 8th year, the…
Q: Is the pareto principle generally accepted as true or accurate? Or is it considered not true?
A: The Pareto principle, named after economic specialist Vilfredo Pareto, indicates that 80% of…
Q: Given a Cobb Douglas production function, q = L0.45 K0.55, determine the Marginal Rate of Technical…
A: Given Cobb-Douglas production function: q=L0.45K0.55 .....(1) We have to find the Marginal…
Q: At i = 10% per year, a machine has a first cost of $8,000 and estimated operating costs and year-end…
A: In the provided case the equated annual cost method of analysis is an optimal computation to decide…
Q: Which of the following most accurately describes direct finance? The lenders and borrowers come…
A: Direct finance occurs when the funds moves directly from lender-savers (i.e. investors) to borrower-…
Q: Carefully explain what is happening in the following market. Indicate the impact if any on demand,…
A: Demand refers to the quantity that a consumer wishes to buy at a given price in a given period of…
Q: Why do organic milk and non-organic milk not have the same elasticity?
A: The concept of elasticity is used to study the changes in quantity demanded or supplied due to…
Q: 1. Assume the cost of making 30 belts is $800, the cost of making 35 $910, and the cost equation is…
A: Marginal cost measures the change in total cost due to a change in quantity produced. Marginal cost…
Q: Why is there a need to regulate Investment banks?
A: We can say, Investment banks are companies or corporate divisions that functions as an advisory in…
Q: The estimated capital investment and the annual expenses) for four alternative designs of a…
A: Given, MARR = 10% Study Period = 5 years
Q: Basket Items Unit $ per unit (2020) $ per unit (2021) $ per unit (2022) Cougar Tail 1 donut $5 $4.50…
A: Inflation is measured using the consumer price index (CPI). It is used to calculate the typical…
Q: If the price elasticity of demand for gasoline is 0.20: Group of answer choices the demand for…
A: Given The price elasticity of demand for gasoline is 0.20 Price elasticity of demand measures the…
Q: Consider the utility function u(x₁, x₂) = √√x₁+√√x₂. Prices are p₁, P2, and income is I. (a)…
A: Given Utility function: u(x1,x2)=x1+x2 ..........(1) The price of good 1 is p1 and…
Q: 1. Based on the interest rates and cash flows shown in the cash flow diagram, determine the value of…
A: Solution- Given- Interest rate= 10% Future Value of cash flows:- = $150000 * (1.03) * (1.03) *…
Q: Why is
A: Introduction Perfect competition is a market situation where average revenue and marginal revenue…
Q: If the two points on the demand for Norman's rooms lie on a straight-line demand curve, what then is…
A: Given: At the price of $110 quantity purchase is 10, and at a price of $130 quantity purchase is 8.…
Q: Research has found that poor people in rural, developing societies have many children, even when…
A: The poor people in rural societies in an economy have many children; and use of contraceptive…
Q: Consider an individual with preferences over two goods. This consumer is maximising utility when:…
A: According to consumer choice theory, when faced with a limited budget, consumers seek to maximize…
Q: A firm has the following revenue and cost functions. TR = 90 Q – Q2 TC…
A: TR = 90 Q – Q2 TC = 2Q 2+ 30 Q
Q: Question 9 Which of the following is true in the principal agent model?1. The agent has more…
A: The principal and agent problem is associated with the asymmetric information. The agent tends to…
Q: Armando consumes two goods: grapes and wine. He can purchase both at the market and also possesses a…
A: The Alfred Marshall-named Marshallian demand function defines how much a consumer needs of a certain…
Q: The interaction of the NZ taxation and welfare (benefits) systems creates Select one: a.greater…
A: The marginal tax rate will be computed as amount of tax paid on for each extra dollar of income. The…
Q: Too many cooks spoil the broth. Which core principle is represented in this scenario (if any)?…
A: The law of diminishing marginal returns state that as more and more units of the variable factor are…
Q: Market: Toilet Paper Toilet paper production plants are shut down due to covid 19 outbreaks.…
A: The equilibrium price and quantity of any good depend on both supply and demand determinants. In…
Q: Which of the following is a deflationary measure? Select one: a. Discouraging savings b. Decreased…
A: Aggregate demand is composed of consumption spending, investment, government purchases and net…
Q: Consider the following pairs of goods. In each case, which would you expect to have the more elastic…
A: A variable's elastic response to changes in other variables is measured. In this way, it is possible…
Q: Year (Base year) 1850 2190 2380 2021 2560 Q.3.2.1 Use the information in Table 3-2 to measure the…
A: CPI (Consumer Price Index) informs on the change in the prices of a basket of items and services…
Q: (1) Od 50 60 ВО 90 100 (2) Qd 40 50 Multiple Choice 60 70 80 $9 and 70 units $10 and 60 units $8 and…
A: The study of how buyers and sellers interact to establish transaction prices and quantities is known…
Q: 2. Given the cash flow diagram below, answer the questions by marking on correct HOY 1 2 ← $19,500…
A: The initial cost of an asset/machine/project is the cost incurred at time zero. The initial cost is…
Q: Question 8 When the Chinese firm "eZubao" went bankrupt in 2016 it was called a "Ponzi scheme." It…
A: Ponzi schemes are investment plans where the operator or operational firm pays returns to investors…
Q: Q3/ Suppose that the price elasticity of demand for a packet of candy is -2.3 and the price…
A: The ratio of the percentage change in a product's quantity demanded to the percentage change in…
Q: PROBLEM 3. If you borrow money from your friend with simple interest of 12%, find the present worth…
A: Present value refers to the value of the expected income determined from the date of valuation. This…
Q: what are the differences in debt sustainability under the heterodox/MMT and Neoclassical/orthodox…
A: The investigation and research of economic ideas seen to be outside of the mainstream or orthodox…
Q: Timothy received $100 for his birthday. He wants to buy either a new skateboard or a new mp3 player…
A: Scarcity means that the resources available are less than the resources required. Resources here can…
Step by step
Solved in 2 steps
- 1. Consider a two-product firm under pure competition. With pure competition, the prices of both commodities will be taken as exogenous, denoted by P₁ and P₂. The production cost is C (Q₁, Q2) = Q +3Q/²2 where Q₁ and Q₂ represent the output levels of product 1 and product 2. (e) Find the maximum proifit that this firm can earn as a function of P₁ and P₂.2. You are the Southeastern Michigan regional manager at Coca-Cola, responsible forproduction and pricing in the Metro Detroit area. Your primary competitor is Pepsi. The marketresearch team at Coca-Cola is thinking about launching a new product, Orange Vanilla Coke, toboost the brand. The cost function to produce a 12-pack of 12 fl. oz. cans of Orange VanillaCoke is C(qcoke) = 0.25qcoke and the market research team has estimated inverse market demandfor a 12-pack of this new “pop” in Southeastern Michigan to be P = 10.25 – 0.00025Q. a. Assuming Pepsi decides not to produce a similar product, allowing Coca-Cola to maintainmonopoly power in the market for orange vanilla cola, what price and quantity will youchoose to maximize profit? How much profit does Coca-Cola earn?b. What price and quantity you would choose to maximize profit if Pepsi spies discover yourproduct before launch, allowing Pepsi to produce and launch an identical product at the sametime. For your answer, assume the cost…Suppose you are a perfectly competitive firm producing computer memory chips. Your production capacityis 1000 units per year. Your marginal cost is $10 per chip up to capacity. You have a fixed cost of $10,000 ifproduction is positive and $0 if you shut down. What are your profit-maximizing levels of production andprofit if the market price is ( a ) $5 per chip, ( b ) $15 per chip, and ( c ) $25 per chip? For case ( b ), explainwhy production is positive even though profits are negative?
- Consider a competitive firm with total costs given by T C(q) = 100 + 10q + q^2. The firm faces a market price p = 50. (a) Graph the AT C, AV C, MC, and MR curves in a single graph, and indicate the profit maximizing level of output. If there are profits, shade the region corresponding to profit and label it. (b) If fixed costs increase from 100 to 500, what happens to the profit maximizing level of output, T R, T C, and π? (c) If fixed costs increase from 100 to 500, should the firm continue to operate in the short-run? What about the long-run?The figure deplcts the demand curve for Beautiful Cars, and the marginal cost and Isoprofit curves of the car manufacturer. The quantity and price at polnt E are (Q*. P*) - (30, 5,500). Suppose now that the firm Increases the price to 5,550 and chooses the corresponding level of output from the demand function at the new price. Based on this Information, whlch of the following Is correct? 8,000 Demand curve 100 Quantity of cars, O O The firm will sell 30 cars at the higher price. O The firm's profit remains the same. O The quantity of cars produced reduced. O Tho firm's profit is now incroasod Price, Marginal cost ($)1. There is an industry consisting of 12 firms, each with total cost function given by TC(q) 3q² - 2q +867, where the fixed costs are non-sunk. The demand for the industry's product is given by Q¹ (p) = 448 - p per month. Firms are price takers. (a) Find the short-term equilibrium price, demand, the quantity produced by each firm, as well as firm's profit. What is the consumer surplus? What about the producer's surplus? (b) The government urgently needs to collect some extra tax revenues in the next four months to meet debt payments. This implies that it needs to collect the amount of T = 1000 per month from the industry. Calculate the tax level needed to raise this revenue depending on the type of tax. Which tax type is the better from a welfare perspective? i. An output tax of t per unit sold imposed on the firms. ii. 7-percent tax on firms' profits.
- Attempt all questions. Q1. a) A local Pepsi company has total costs of production given by the equation TC-500+10q+Sq2. This implies that the firm's marginal cost is given by the equation MC 10+10q. The market demand for cold drink is given by the equation QD-105 (1/2)*P. Write the equations showing the company's average total cost and average variable cost and average fixed cost, each as a function of q. Show the firm's MC, ATC and AVC on one graph. What is the breakeven price and breakeven quantity for this firm in the short run? What is the shutdown price and shutdown quantity for this firm in the short run? If the market price of the output is $50, how many units will this firm produce? iv) Assuming the cold drink industry is perfectly competitive, what output would be produced by the firm in long-run equilibrium? What would be the long-run equilibrium price? i) ii)c)Given that the cost function MC=x-2x^2-1 and the revenue function as MR=2x^2-3x-1.Assuming pure competition,determine the point atwhich profit maximized and the total profit made.Mondi Company produces party boxes that are sold in bundles of 1000 boxes. The market is highly competitive, with boxes currently selling for R100 per thousand. The company has a total and marginal cost curve given by: TC = 3,000,000 + 0.001Q2 MC = 0.002Q Q is measured in thousand box bundles per year. [5] a. Determine Mondi's profit maximizing quantity. b. Calculate if the firm is earning a profit or a loss? c. Based on the analysis above, should Mondi Company operate or shut down in the shortrun?
- Suppose market inverse demand function is p(y)=100-Yt where Yt is total production in the market. Assume that there are two firms with following marginal cost MC(firm 1)=Y1 MC(firm 2)=2*Y2+10 Assume that Yt=Y1+Y2 Set up profit function for both firms. What is the best response function of each firm by taking into account action of other firm? What output level is going to be produced by each firm in equilibrium? Assume that Firm 1 is leader in the market and going to act first. What will be the best response and output level of firm 2. What is difference between previous and new situation? Why? What is difference between Bertrand and previous competition? How would you like to find equilibrium price?Question Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh Q1 = 12 – P1 Sri Lanka Q2 = 8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) Now consider two cases (i) Company is effectively able to price discriminate in the two markets. What will be the total profits? (ii) Suppose the company does not engage in price discrimination. By charging the same price in the two markets what are the profit maximizing levels of price, output, and the total profits? c. Analyze, with graphs, the two alternative pricing strategies…1. Consider a two-product firm under pure competition. With pure competition, the prices of both commodities will be taken as exogenous, denoted by P₁ and P₂. The production cost is C (Q1, Q2) = Q +3Q²/ where Q₁ and Q₂ represent the output levels of product 1 and product 2. (b) (10) State the first-order necessary conditions for profit maximization.
