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Suppose an auto manufacturer sells cars at $10,000 per car. Marginal costs are $5,000 per car. The vice president in charge of sales and marketing says that one month sales with discounts of 10% typically increase sales by roughly 80% during the sale, suggesting a demand elasticity of -8. You advise her to lower her prices on a permanent basis. She responds that her cars are durables and she is worried that she is "stealing" customers and shifting demand from the future. Does she have a point?
A consumer may consume food x and hours of leisure time h. The price of one unit of food is $1. Initially, the consumer has no money and 24 hours of spare time that she may devote either to work, or to leisure. The consumer earns wage rate s per hour..
Compare economic performance in an oligopolistic market with that in a purely competitive one. Is oligoploy the best market structure for rapid technological development? Why or why not?
You are working for a company that is planning to invest in a foreign country. Management has requested a report regarding the attractiveness of alternative countries based on the potential return of foreign direct investment (FDI).
Consider a strategic setting in which two geographically distinct firms (players 1 and 2) compete by setting prices. Suppose that consumers are uniformly distributed across the interval [0,1], and each will buy either one unit or nothing. Firm 1 is l..
Based on only these account balances, calculate the total owners equity at the end of the year. ( (Answer in whole $s without the $ sign or comma, xxxxx, e.g. 1
And in this market there are two firms with MC=AV= $10. Perfect competition price, quantity, and consumer surplus?
What happen if the marginal product of labor is 23, is the firm minimizing cost. What happen if the marginal product of labor is 21, is the firm minimizing cost.
Consider a box with width W, length L, and height H. Suppose you have to construct a box with the following constraint: W+L+H equal or less than 30. Suppose W has to be 12. What is maximizing volume of box? What should L and H be?
If the market price of the product is 270, how much output should the firm produce in order to maximize profit. How much profit will this firm make.
A large wood products company is negotiating a contract to sell plywood overseas. The fixed cost that can be allocated to the production of the plywood is $800,000 per month. The variable cost per thousand board feet is $155.50. For this situation, d..
Describe a time when you experienced effective communication in a business environment and discuss at least three (3) reasons why you perceived the communication to be effective, and explain the resulting impact to the business.
For a particular competitive firm, the minimum value of average variable cost (AVC) is $12 and is reached when 200 units of output are produced. For the same firm, the minimum value of average total cost (ATC) is $15 and is reached when 230 units of ..
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