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A monopoly faces a market evenly split between high valuation consumers, with demand p= 10- y and low valuation consumers with demand p= 8- 2y. Marginal Cost = 0arbitrage is impossible and the firm is free to to use two parts tarrif pricing for these groups.Determine the firm's best second degree pricing scheme, explain why it is the best outcome for the firm.
A firm called Altobella Vineyard produces Concord grapes in a perfectly competitive market in which monthly demand is given by the equation Q = 1800 - 16P and monthly supply by the equation Q = -660 + 14P, where P is the price per crate of grapes.
The market interest rate is 10 percent and is expected to stay at that level. Explain your choice in each of the following situation: a. Would you prefer $500 gift today or $540 gift next year b. Would you prefer a $100 gift now or $500 loan without..
The robotics corporation produces cuddly toys using only computer driven robots. The quantity of toys (t) produced per year is given by T = 10r where r is the number of robots used during each year of production If the market price of robotics 200..
Why is advertising prevalent in many oligopolies, especially when industry demand is inelastic Illustrate your answer by assuming that with advertising, a firm's demand curve has price elasticity of -1.5 and without advertising, it is -2.
Susanna Nanna is the production manager for a furniture manufacturing company. The company produces tables (X) and chairs (Y). Each table generates a profit of $80 and requires 3 hours of assembly time and 4 hours of finishing time. Each chair gen..
Customer Group B is willing to pay $29,000 for the SUV and $1,000 for the towing package. Assuming the manufacturer cannot price discriminate but can bundle the products or sell them separate, which of the options below maximizes its revenues
The attendant quotes you $100. Suppose you rate the opportunity cost of getting back in your car and sampling another price at $5. Assuming you're risk-neutral, what should you do A. Sample another price. B. Stay at this motel.
The recent average starting salary for new college graduates in Economics is $47500. Assume salaries are normally distributed with a standard deviation of $4,500. a)What is the probabilty of a new graduate receiving a salary between $45,000 and $50..
Manke a graph showing the relationship between two variables, X and Y . Determine whether the relationship is negative or positive
Recently, the owner of a Trader Joe's franchise decided to change how she compensated her top manager. Last year, she paid him a fixed salary of $65,000, and her store made $120,000 in profits (not counting payment to her top manager). She suspec..
The following data were collected on the height (inches) and weight (pounds) of women swimmers where height is the independent variable and weight is the dependent variable. Height (x) = 68, 64, 62, 65, 66 Weight (y) = 132, 108, 102, 115, 128
Suppose the total benefit derived from a given decision, Q, is B(Q)=25Q-Q^2 and the corresponding total cost is C(Q) = 5 + Q^2, so that MB(Q) = 25 -2Q and MC(Q) = 2Q What is the total cost when Q=2 and when Q=10
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