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Modifying a product to increase its "value added" can benefit customers and enhance supplier profits. For example, suppose an improved version of a product increases customer value added by $25 per unit. (In effect, the demand curve undergoes a parallel upward shift of $25.) a. If the redesign is expected to increase the item's marginal cost by $30, should the company undertake it? b. Suppose instead that the redesign increases marginal cost by $15. Should the firm undertake it, and (if so) how should it vary its original output and price?
the worker doing the mathematical operation by hand in 32 seconds, and with the computer application, the operation is doing in 16 seconds with a 50 % of improvement. (theoretic - experimental)/theoretical *100% is the used formula for the 50%
Compute the equivalent annual inflation rate, based on the US Consumer Price Index, for the period 1981 (when CPI was 90.9) to 1986 (when CPI was 109.6) estimate the Consumer Price Index in 1996, working from the 1987 CPI.
His first year's salary is $52,000, and he expects the salary to grow 4% each year. How much will be in his account after he makes the last deposit? What uniform amount can he withdraw from the account for 25 years beginning one year after his las..
Luxembourg imports a good at a world price of $10 each. The domestic supply curve is S = 50 +5P where P is in Ecu and 1 Ecu = $1. Demand curve is D=400-10P. Draw demand and supply curves for this good and indicate how much it is imported
Casper consumes cocoa and cheese. Cocoa is sold in an unusual way. There is only one supplier, and the more cocoa you buy from him, the higher the price you have to pay per unit. In fact y units of cocoa will cost Casper y2 dollars. Cheese is sold..
If the rate of discount is 20 percent, a Would you rather receive $100 today or $120 in one year b Would you rather receive $205 today or $240 in one year c Would you rather receive $500 in one year or $610 in two years
During spring break, students have an elasticity of demand for a trip to Florida of -3. How much should an airline charge students for a ticket if the price it charges the general public is $360 Assume the general public has an elasticity of -2.
compute the demand schedule showing the number of workers hired for all wages from zero to $100 a day. What happens to this demand curve if the price of output rises from $10 to $12 per unit?
Weekly demand and cost relations for Sandpiper Products, Inc., are given by the equations P = $180 - $10Q (Demand) TC = $75,000 + $5Q + $7.5Q2 Where Q is the quantity produced and sold per week. a. Determine the profit maximizing price and output. (Q..
Now suppose that there is a second ?rm with cost function c1 (q) above. Whichever cost function ?rm 1 chooses, the second ?rm will observe this choice and then have the option of entering the market or not. If he does not enter, ?rm 1 remains a mo..
Suppose initially (period 0) the economy is endowed with $5 (billion) of capital stock and 10 (thousand) workers (let's ignore the units). We know that saving rate s is 0.15, population growth rate n is 0.01 and depreciation rate d is 0.09. Suppos..
Consider a person with an initial wealth level of 100 who faces a change to win 20 with probability 1/2 and to lose 20 with probability 1/2. A. What is the expected value of the gamble Is this gamble fair or better than fair
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