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Consider a consumer who has an experienced utility function given by UEU(x,m)=2sqrtx+m. Let q denote the market price of good x, and assume that it remains fixed throughout the problem. The company selling the good x starts an advertisement campagin that has the following effect on the consumer: he makes decisions as if maximizing a decision utility function given by UDU(x,m)=4sqrtx+m. Write down the expression for the difference between the consumer demand and his optimal level of consumption.
On Valentines Day, the prices of flowers and chocolate are usually high compared to other times. How do the principles of demand and supply describe the reasoning behind such price increases?
You've been appointed by an unprofitable firm to determine whether it should shut down its unprofitable operation.The firm currently employs 70 workers to produce 300 units of output per day.
Find the supply function for the hospitals and Suppose the hospitals merge into one umbrella organization to improve their bargaining position. What would the new price and equilibrium be?
What is equilibrium price?What is the equilibrium quantity(Q)? Compute the consumer surplus a=384 b=296 c=0 d=112 e=-112 f= none of the above Compute the Consumer Surplus?
Calculate the cross-price elasticity of demand and are the goods complements or substitutes
If our example patron was a teenager, it's likely the power need that he expressed was a normal teenage reaction to a parent interfering in his life. In additional library visits by his choice, he might reveal himself as achievement motivated. If tha..
Despite the absence of patent protection, Semi-Salt has averaged accounting profits of 5.5 percent on investment since it began producing polyglutamate- a rate comparable to the average rate of interest that large banks paid on deposits over this ..
We make selections as customers every day. Opportunity cost is defined as a person's next best alternative or cost of what you give up when you make a choice.
Name the circumstances which indicate an oligopolistic market structure and discuss a real life example of such a market structure. What are the most significant differences between oligopolistic and perfect competition from the consumer's point o..
A firm can produce steel with or without a filter on its smokestack. If it produces without a filter, the external costs on the community are $500,000 per year. If it produces with a filter, there are no external costs on the community, and the fi..
There're 10 auto firms in this problem each showing their market share percentage (US auto industry). The proposed merger involves Ford 22% and BMW 1%.
Compute the weighted average cost of capital using book value weights. Compute the weighted average cost of capital using market value weights. Compare the answers obtained in parts a and b. Describe the differences.
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