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Suppose the monopoly has a constant marginal cost of 0 and can sell its good to two different groups of customers. One group of "poor" has demand function P = 1.5 - Q; the other - equally large group of "rich" has demand: P = 2 - Q. The seller cannot tell whether a particular consumer is rich or poor, but she knows that there is equal number of both types.
a. What is the optimal pair of two-part tariffs: the pairs Fr - the entry fee and pr - the price per unit that monopoly intends for the rich guy and Fp - the entry fee and pp - the price per unit that monopoly intends for the poor guy?
An investment has just been made to purchase a small CNC lathe of $17,000. This CNC lathe will be used to make ornamental parts for sale. Receipts are estimated at $25,000 per year with costs running $20,000 per year, the salvage value is $3,000 at t..
Which of the following statements is true regarding trade in agriculture? The united states exports almost 50 percent of its agriculture production. In general, governments let agriculture markets operate on free trade principle. nations do not mind ..
At the age of 20, you decide to open an investment account for retiring. You plan to retire at 50. How much will you have paid into the account monthly to accumulate enough funds to withdraw 9000 per quarter for the following 20yrs. till your 70. al..
Write a short essay, using the market failure analysis, to justify why the U.S. government should or should not be involved in the provision of (1) airport security and (2) medical care.
Public health information can be broadcast at a cost of $100. Public health information is a pure public good, in that many people can use the information simultaneously and preventing people from using the information is very difficult. At a price o..
A sample of 18 Jacksonville employees Explain how they travel a mean of 399 miles per month, with a sample standard deviation of 33 miles.
Suppose the MWTP in periods 1 (now) and 2 (one year from now) is given by P = 8-0.4q. Marginal extraction cost = $2. r = 20%. The available supply is 20 units. Calculate the allocation of outputs across the two periods that maximizes the present valu..
How might globalization and advances in information technology affect the trade- offs between technical and agency efficiency?
Assume initial equilibrium in the domestic automobile market. Using supply and demand analysis explain what will happen to both the equilibrium price and quantity if the following happens: You hear on the news that the Japanese have increased the pri..
If she plans to sell this new stock exactly 1 year from now and realize the same return as she has just made, what must be the total amount she receives next
Is the monopolist a price taker. Explain. Is a monopolist allocatively efficient? Why or why not?
Explain the differences between management skills and entrepreneurship. Discuss how each factor contributes to the economic success of a business
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