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An upstart phone company has only two potential large customers, Firm A and Firm B. Firm As monthly demand for phone calls is Q1 = 2; 800 - 200p and Firm 2s is Q2 = 5; 000 - 100p. The marginal cost of providing a phone call is 6 cents. Assuming the phone company has to charge the same monthly rental fee and unit price to all its customers, at what level should it set these charges?
assume that the interest rate on a one year bond is 7 percent today and the interest rates expected on one year bonds in the future are 6 percents in 1-year, 5 percent in 2-year , and 4 percent in three years bond. according to the exceptions theo..
One aspect of obtaining a college education is the prospect of improved future earnings in comparison to non-college graduates. Sharon Shay estimates that a college education has a $28,000 equivalent cost at graduation.
Compute the elasticity for each variable and briefly comment on what that data gives you in each case.
Let a firm's long-run production function be Q= 1/10LK +3L^2K-1/10L^3K Assume that in the short-run the firm's labour input is fixed at 10 units. a) What is the firm's short-run production function? b) What are the short-run average and marginal prod..
A firm uses two variable inputs, labor, L, and raw materials, M, with typically shaped isoquants. It pays $20 per hour for L and $5 per unit for M. At the current mix of L and M, the marginal products of L and M are: MPL = 20 MPM = 4
A $40,000 machine will be purchased by a company whose interest rate is 12%. The installation cost is $5K, and the removal costs are insignificant. What is its economic life if its salvage values and O&M costs are
The Rapid Engine Corporation is a multinational producer os small gasoline and Diesel motors. Rapid hs estimated the given cost experience for a new 3.5hp engine over a sample of 122 observations.
Discuss the relationship in the price and quantity demanded in question four on a graph. Is the relationship direct or inverse?
Under patent protection, a firm has a monopoly in the production of a high-tech component. Market demand is estimated to be: P = 100 - 0.2Q. The firm's economic costs are given by: AC = MC = $60 per component.
In the late 1990s a growing number of economists argued that world policymakers were focusing too much on fighting inflation. The economists also argued that the technical level of potential output had risen. Show their argument using the AS/AD mo..
The price elasticity of demand for a firm's product is equal to -1.8. the firm currently sells 4,000 units per day at a price of $2. if the firm increases its product price by 10%, then how much can it approximately sell
Dakota Trucking Company (DTC) is evaluating a potential lease for a truck with a 4-year life that costs $40,000 and falls into the MACRS 3-year class. If the firm borrows and buys the truck, the loan rate would be 10%, and the loan would be amorti..
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