The mean one-year return for the NASDAQ, a group of 3,200 small and medium-sized companies, was 16.9%. Historically, the one- year returns are approximately normally distributed, the stan- dard deviation in the S&P 500 is approximately 20%,
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Missy Walters owns a mail-order business specializing in clothing, linens, and furniture for children. She is considering offering her customers a discount on shipping charges for furniture based on the dollar-amount of the furniture order.
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Allow an inverse demand curve in a monopoly to have the following form: P[Q]=50-3*Q, allow the MR curve to be: MR[Q]=50-6*Q and say the firm has TC[Q]=10*Q2, and MC[Q]=20*Q. Derive the price the monopolist will charge.
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Net present value: Kingston, Inc., is looking to add a new machine at a cost of $4,133,250. The company expects this equipment will lead to cash flows of $814,322, $863,275, $937,250, $1,017,112, $1,212,960, and $1,225,000 over the next six years.
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If Roger could insure himself fully against the loss and the insurance is actuarially fair. d) What is the fair premium for his risk? e) Calculate his utility gain due to insurance. f) What value for the premium (instead of a fair premium would cause..
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The GDP deflator in Econoland is 200 on January 1, 2005. The deflator rises to 242 by January 1, 2007, and to 266.2 by January 1, 2008. What is the annual rate of inflation over the three year period from January 1, 2005, to January 1,2008
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An auto dealership estimates that its demand curve has an elasticity of 2.78. If it wishes to increase sales by 12%, by how much should it decrease price What will happen to revenue (rise or fall) If instead it raises price by 20%, what is the per..
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There are only two firms in the widget industry. The total demand for widgets is Q = 30 - 2P. The two firms have identical cost functions, TC = 3 + 10Q. The two firms act as though they were a monopoly. At what price and quantity will this cartel ..
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Marginal Revenue of a Monopolist a. Prove mathematically that marginal revenue is always less than price, P(Q). b. Explain this intuitively as well.You may use a graph to help you. Remember marginal revenue is the money the firm takes in after sell..
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Imagine that Gillette has a monopoly in the market for razor blades in Mexico. The market demand curve for blades in Mexico is P = 968-20Q, where P is the price of blades in cents and Q is annual demand for blades expressed in millions.
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Lawson just purchased an income annuity for $323,335. The income annuity pays interest at a rate of 3.85 percent compounded monthly. The first income payment will be made today and the final income payment will be made in twenty years.
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Adrian is about to borrow $2350 from his uncle. He has an option to repay the loan at the end of the year 5 with 10.75% interest per year or with 5% interest per year compounded annually. What is the difference of the total interest paid over 5 ye..
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