Solve for the optimal contract length

Assignment Help Business Economics
Reference no: EM131457274

Your firm wants to write a contract with a supplier to purchase inputs. The marginal benefit of the contract is: MB(L) = 20 - L, while the marginal cost is: MC(L) = 3L. Draw the MB and MC curves on the graph below. Solve for the optimal contract length (x), and indicate this value below.

X is the years and

Y is the $

Reference no: EM131457274

Questions Cloud

How much should buyers offer to acquire the firm : An owner-manager of a firm is contemplating selling it to any one of a number of prospective buyers. The firm has net operating loss carry-forwards.
Production process exhibit cost complementarities : Does this firm's production process exhibit cost complementarities? How do you know?
Questions about the production process of firms : Suppose the marginal produce of labor is: MPL= 10, the marginal product of capital is:
Identify the key elements that serve as a positive draw : Identify the key elements that serve as a positive draw of this talent to your organization. Why should your company consider including that as part of package.
Solve for the optimal contract length : Solve for the optimal contract length (x), and indicate this value below.
Discuss dr wilsons prescription for the private sector : Discuss Dr. Wilson's "prescription" for the private sector, business, and government. Do you concur with this prescription? Why, or why not?
Define even absent restrictions on deductibility of interest : Assume you face a progressive tax rate system. Show that it does not pay for you to reduce your explicit tax rate on fully taxable income to below the implicit
Draw the budget line associated : 1. On the graph below, draw the budget line associated with each of the following prices of goods X and Y and income levels:
List the two assumptions that underlie the conclusion : Explain how these assumptions either do or do not apply to an industry of your choosing.

Reviews

Write a Review

Business Economics Questions & Answers

  Qconsider two goods that are perfect complements for

q.consider two goods that are perfect complements. for instance car frames and tires. an individual likes owning cars

  If two goods are substitute goods

If two goods are substitute goods,

  Conduct research on the current state of social security

Conduct research on the current state of Social Security. Your 5 page paper should address the following: Explain the concept of Social Security as originally envisioned by President Roosevelt. Evaluate the viability of Social Security within the nex..

  Allocative efficiency-type of market structures

Allocative efficiency (where P = MC) is most likely to occur under which of the following type of market structures?

  Description of the expected behaviors

Post a 1- to 2-paragraph description of the expected behaviors an individual might change because of a long-term relocation to another country. Explain how the choice to assimilate or acculturate might affect the choice of behavior changes. Explai..

  Which do you believe is the most effective strategy

In order to reduce the unemployment rate jobs must be created... new jobs! Both the Federal Reserve and government have proposed a number of solutions and programs in order to create these jobs. In your opinion which do you believe is the most effect..

  Integrated network based on internet protocol communications

Bell Canada announced a four-year agreement worth about C$84 million to implement an integrated network based on Internet Protocol Communications and convert about 1,100 bank branches to an IP Virtual Private Network across Canada for the Bank of Mon..

  1does easy access to distribution channels at best buy

1.does easy access to distribution channels at best buy office depot as well as the direct- to- consumers on the

  Find the change in units demanded when the price changes

The price elasticity of a demand for a good is -0.94, the cross-price elasticity is 1.94, the income elasticity is 1.23, and consumers currently purchase 1,318 units of the good. Find the change in units demanded when the price changes -3.2 percent.

  Certain cash flow sequence started

You were told that a certain cash flow sequence started at $3000 in year 1 and increased by $2000 each year. How many years were required for the equivalent amount worth of sequence to be $12000 at an interest rate of 10% per year? You were told that..

  Find helens optimal consumption basket

Helen’s preferences over CDs (C) and sandwiches (S) are given by U(S, C) = SC + 10(S + C), with MUC = S + 10 and MUS = C + 10. If the price of a CD is $9 and the price of a sandwich is $3, and Helen can spend a combined total of $30 each day on these..

  Big mac was most inexpensive

In 2010, a Big Mac was priced at $2.49 in New York, 3.36 euros in Rome and 12 yuan in Beijing. If the exchange rates were $.72 euros = 6.63 yuan, in which city that Big Mac was most inexpensive? Please show the process.

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