Question 1 suppose you are working as a consultant for a

Reference no: EM13375806

Question 1. Suppose you are working as a consultant for a perfectly competitive firm that is worried about its policies in the short run. What would you recommend in terms of quantity changes (raise, cut, shut down or stay put) and price changes (raise, cut, stay put) in each of the following two situations:

a) P = $20; MC = $5; TVC = 1250; AFC = $10; TFC = $500.

b) AVC is at its minimum; AFC = $5; ATC = $9; TC = $90; TR = $50

[P = price; Q = quantity; AVC = average variable cost; ATC = average total cost; TC = total cost; MC = marginal cost]

Question 2. Suppose you are working as a consultant for a firm that is a monopoly and is worried about its policies in the short run. What would you recommend in terms of quantity changes (raise, cut, shut down or stay put) and price changes (raise, cut, stay put) in each of the following situations (a through c):

a. MR = $248 P = $268 MC = $198 AVC = $208
b. MR = $298 MC = $348 AVC = $288
c. P = $269 MC = $319 AVC = $289

[P = price; MR = marginal revenue; AVC = average variable cost; MC = marginal cost]

Question 3. Libertyville has two optometrists, Dr. Jones (J) and Dr. Smith (S). Each optometrist can choose to advertise his service or not. The net revenue to each optometrist, in thousands of dollars, is listed on the payoff matrix below. Answer questions a through c:

a. Does Dr. Jones have a dominant strategy?
b. Does Dr. Smith have a dominant strategy?
c. Does a Nash equilibrium exist for this game?

2242_What would you recommend in terms of quantity changes.png

Reference no: EM13375806

Questions Cloud

The graph on the left shows the short-run marginal cost : the graph on the left shows the short-run marginal cost curve for a typical firm selling in a perfectly competitive

In a simple economy people consume only 2 goods food and : in a simple economy people consume only 2 goods food and clothing. the market basket of goods used to compute the cpi

Analysis on the effect of world recession on uae : analysis on the effect of world recession on uae economy1000 words overall word count for specific sections are in the

Case study - grand winesyou are an employee of grand wines : case study - grand winesyou are an employee of grand wines ltd and project leader of a proposed project to equip each

Question 1 suppose you are working as a consultant for a : question 1. suppose you are working as a consultant for a perfectly competitive firm that is worried about its policies

Imagine an economy consisting of 1000 members there is one : imagine an economy consisting of 1000 members. there is one produced good corn which all like to consume. corn is

On their own firms have little incentive to invest in : on their own firms have little incentive to invest in pollution abating technologies such assmokestack filters a

Question 1type the following command in stata to load the : question 1type the following command in stata to load the smoke dataseta you are interested in examining whether living

1 an article in the wall street journal observes for 2008 : 1. an article in the wall street journal observes for 2008. productivity grew by an astounding 2.8 from 2007 even as

User Account

All Pages