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Zelda Industries is the only firm of its kind in the world. Due largely to historical accident, it began producing streganomas in 1985 in a vacant warehouse. Virtually anyone with a degree in college chemistry could easily replicate the firm's formula, which is not patent protected. Nonetheless, since 1985 Zelda has averaged accounting profits of 6 percent on investment. This rate is comparable to the average interest rate that large banks paid on deposits over the period. Do you think Zelda is earning monopoly profits? Why?
Which of the following represents a short-run decision? A farmer discovers that the total cost of growing 2000 acres of corn is $400,000 and that the total cost of growing 2001 acres of corn is $401,000. The marginal cost of the 2001st acre of corn i..
A black market
After reading the short story, "The Fatal Equilibrium," use the Mundell-Fleming model to explain precisely how the inspector figured out who the murderer was.
Assume that the firms act independently as in the Cournot model i.e., each firm assumes that the other firm's output will not change.
The licorice industry is competitive. Each firm produes 2 million strings of licorice every year. Total cost of strings have an average.
Assume that your community has a newly-discovered radon health problem. From which state and local government and non-government agencies would you seek advice? Why would they be chosen? How does this fit their mission? What expertise would they have..
The monopolist from the previous problem now faces a specific tax of 20, τ = 20. What are the optimal quantity and price given the tax? Calculate the welfare loss from the tax.
GM announced that it will close its Oshawa truck plant in 2009 and a Windsor transmission plant in 2010. Ford also plans a 10 percent cut in white-collar, salaried positions. In total, over 4000 direct jobs will be lost. What is the relationship betw..
If overseas producers can sell in the domestic market Illustrate what is the equilibrium price. Illustrate what is the equilibrium quantity.
Illustrate what philosophical principle did Google's managers adopt when deciding that the benefits of operating in China outweighed the costs.
Explain how does the price elasticity for flu vaccinations change in times when flu is more prevalent versus times when flu is less prevalen.
Why do points on a utility possibility curve represent efficient allocations of resources? Why must the utility possibility curve be downward sloping.
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