Is the firm charging the optimal price for the product

Assignment Help Macroeconomics
Reference no: EM13326885

Suppose a firm has a constant marginal cost of 10$. The current price of the product is 25$, and at that price it is estimates that the price elasticity of demand is -3.0

a) Is the firm charging the optimal price for the product? Demonstrate how you know.

b) Should the price be changed? if so, How?

Reference no: EM13326885

Questions Cloud

Compute the magnitude of magnetic field within the solenoid : A long solenoid has a length of 0.69 m and contains 1395 turns of wire. What is the magnitude of the magnetic field within the solenoid
What is the optimal quantity for the monopolist : What is the optimal quantity for the monopolist? What is the corre-sponding price
How do bypass polymerase differ from replicative polymerases : What are bypass polymerases. How do they differ from the replicative polymerases. How do their special features facilitate their role in DNA repair.
What was the average force exerted on the nail : A 0.600 kg hammer is moving horizontally at 8.00 m/s when it strikes a nail and comes to rest after driving it 1.00 cm into a board. What was the average force exerted on the nail
Is the firm charging the optimal price for the product : Suppose a firm has a constant marginal cost of 10$. The current price of the product is 25$, and at that price it is estimates that the price elasticity of demand is -3.0
Calculate the orbital speed of the second satellite : A satellite is in a circular orbit around an unknown planet. The satellite has a speed of 1.55 104 m/s, and the radius of the orbit is 5.40 106 m. What is the orbital speed of the second satellite
Which would be the best description of the inheritance : hypercholesterlemia is a genetic diease that affects 1 out of 500 people worldwide. this is more that one genetic cause of the disease. Class 1 is described as an autosome dominant disease.
What is the balls direction of motion : A second baseman tosses the ball to the first baseman, who catches it at the same level from which it was thrown. What is the ball's direction of motion just before it is caught
What is the standard deviation for the class : Suppose you just got the results for your economics midterm: you scored 90 points. You also learned that the class grades were distributed normally, the average was 75 points, and the top ten percentile cutoff was 95 points.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd