Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184241
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Chapter 11.A, Problem 3E
(a)
To determine
The practice of transfer price charging by the firm.
(b)
To determine
The change in the
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A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results:
Qd = 25,000 5,000P+ 25M
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Qs = 240,000 + 5,000P-2,000P1
where P is price, M is income, and P₁ is the price of a key input. The forecasts for the next year are M = $15,000 and P₁= $20. Average variable cost is estimated to be
AVC= 14 -0.008Q + 0.000002Q²
Total fixed cost will be $6,000 next year. Suppose that income next year is forecasted to be $10,000 instead. What is the revised price forecast for next year?
Multiple Choice
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$5.00
$7.50
$15.75
$10.50
$12.00
The Lead Zeppelin Company produces powered and steerable lighter-than-air craft. The company’s airships are specially lined and are therefore safer than normal dirigibles. The table below shows the weekly production of dirigibles, along with the associated Average Cost and Total Revenue figures (the Average Cost and Total Revenue figures are actually in thousands of dollars, so the $15 represents $15,000, but we have left off the zeros to save space).
Quantity
Average Cost
Total Cost
Total Revenue
0
--
0
$0
1
$15
15
$10
2
$9
18
$20
3
$8
24
$30
4
$8.50
34
$40
5
$9
45
$50
6
$10
60
$60
7
$12
84
$70
The Lead Zeppelin Company has decided that it will produce at least 1 dirigible. Now the question becomes, how many more dirigibles should it produce to make as much profit as possible?
Use the profit-maximizing rule to explain how many dirigibles the Lead Zeppelin Company should produce to…
Douglas Fur is a small manufacturer of fake-fur boots in Mississauga. The following table shows the company's total cost of production at various production quantities.
Chapter 11 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
Ch. 11.A - Prob. 3ECh. 11 - Prob. 1RQCh. 11 - Prob. 2RQCh. 11 - Prob. 3RQCh. 11 - Prob. 4RQCh. 11 - Prob. 5RQCh. 11 - Prob. 6RQCh. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQ
Ch. 11 - Prob. 10RQCh. 11 - Prob. 11RQCh. 11 - Prob. 12RQCh. 11 - Prob. 13RQCh. 11 - Prob. 14RQCh. 11 - Prob. 15RQCh. 11 - Prob. 1ECh. 11 - Prob. 2ECh. 11 - Prob. 3ECh. 11 - Prob. 4ECh. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 - Prob. 9ECh. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Prob. 13ECh. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Prob. 17E
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