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Problem: A monopoly is considering selling several units of a homogeneous product as a single package. Analysts at your firm have determined that a typical consumer's demand for the product is Qd = 110 - 0.5P, and the marginal cost of production is $140.
a. Determine the optimal number of units to put in a package.
b. How much should the firm charge for this package?
A local ice cream shop in a beautiful Miami beach realizes that its ice cream sales go up along with the number of shark attacks. Assume you are the owner of the shop and you realize that shark attack can be an excellent predictor of ice cream sales ..
Growth rates in the Solow model (II): Suppose an economy begins in steady state and is characterized by the following parameter values: s 0.2, d 0.1, A 1, L 100. Apply your answer to question 8 to calculate the growth of per capita GDP in the period ..
Inducing the worker to exert effort A worker can exert two effort levels, good or bad which induce a production error with probability 1/4 and 3/4 respectively. Calculate the optimal contract and the effort that the principal desires under conditions..
In a 100% socialist structure, the owners would be faced with what challenges? hey lose the opportunity to make and hold onto extreme profits. They assume all the financial risk if their businesses fail. They no longer can change careers because they..
Suppose there is a technological change that allows manufacturers to make computers much more cheaply. In fact, the retail price falls by 15% ceteris paribus. if the price elasticity of demand is -0.8, how much does the quantity demanded change?
The owner/manager of an athletic shoe store has revenue of $260,000 per year and labor, interest, inventory, and miscellaneous expenses of $200,000. The owner also owns the building the store is located in. It would rent out for $5,000 annually. What..
In what type of listing does an owner set a minimum amount that he or she wants to receive from the sale of the property and lets the broker
Now assume that the government imposes a lump-sum tax, T, and just uses the receipts to buy goods (so that g = T). With a lump-sum tax, consumers have an after tax disposable income equal to Y-T. Consequently, saving St = s(Y-T). Provide some intuiti..
Describes key elements of technology-enabled customer relationship management and outline advantages that technology-enabled customer relationship management has over traditional seller-customer interactions.
Is the issue discussed in the article a microeconomic or a macroeconomic issue? Justify your answer.
How does Ticketmaster's "dynamic pricing" affect ticket sales, total revenue and profit? Does Ticketmaster provide a valuable service, or is it a necessary evil to purchasers of event tickets?
Name the key stakeholders you will consult when developing the policy. How will you explain the benefits of the policy to them?
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