Firm an incentive to change the current price or quantity

Assignment Help Business Economics

Reference no: EM13978520

An oligopoist is correctly charging a price of $100 and is selling 400 units of output per day. If the firm increases price above $100, the demand curve is P=110 - 0.025Q. If the firm reduces price below $100, the demand curve becomes P=140 - 0.1Q. If the firm's marginal cost curve is horizontal, within what range could marginal cost vary without giving the firm an incentive to change the current price or quantity?

a. (110,140)

b. (55,70)

c. (60,90)

d. (80,120)

Reference no: EM13978520

Questions Cloud

Products response to a change in price less elastic : Outline a plan that managers in a low-calorie, frozen microwaveable food company could follow in anticipation of raising prices when selecting pricing strategies for making their products response to a change in price less elastic. Provide a rational..

Explain the reasoning behind the shutdown rules : Under what conditions will a firm close in the short run? Explain the reasoning behind the shutdown rules. If a firm has short-run losses, when would it stay open?

Tax cuts imposed on higher-income households : What is the difference between tax cuts imposed on higher-income households compared with lower- and middle-income households? Discuss the implications for the multiplier and the effectiveness of the tax cuts for boosting GDP.

Fed affect the level of bank reserves and the interest rate : How does an open market purchase by the Fed affect the level of bank reserves and the interest rate? How will GDP be affected? Explain the causal chain. Explain how interest rates and bond prices are related to one another. Why is this important for ..

Firm an incentive to change the current price or quantity : An oligopoist is correctly charging a price of $100 and is selling 400 units of output per day. If the firm increases price above $100, the demand curve is P=110 - 0.025Q. If the firm reduces price below $100, the demand curve becomes P=140 - 0.1Q. I..

Explain the importance of liquidity management : Banks manage their assets in a variety of ways. Explain the importance of “liquidity management”? What is the concern of the bank in regard to the liquidity of its assets? What can banks do to management liquidity risk?

Complicated in maintaining safety and soundness : The role of Bank Regulation has become increasingly complicated in maintaining “Safety and Soundness” of the Financial System. What is Micro-Prudential Supervision of banking institutions? The 2000s witness a dramatic increase in Financial Engineerin..

Inefficiencies associated with government granted monopolies : Do you vote? Why or why not? What does the probability of decisiveness suggest you should do? What are the inefficiencies (social waste) associated with government granted monopolies?

Withdraws the money from savings account : Sally Rand owns a ceiling fan company. She sells 1,000 ceiling fans at $50 each. Each fan costs her $20. She uses her own money to buy the fans; she withdraws the money from her savings account where it earns 5 percent interest. Before going into the..

User Account

All Pages