Reference no: EM13703241
Industrial Organization
(1) Suppose a store is located in the middle of Main Street, which is one mile long. Marginal transportation cost is given by t=$80 per mile round trip. The average production cost of the product sold is given by c=$32. Customers value each unit of our store's product at V=$50.
(a) If the firm wants to sell to only 25% of all people on Main Street, what will its price be? Is this doable?
(b) Now assume it wants to sell to 50% of the people, what will its price be? Is this doable?
(2) (unrelated to question (1). Assuming a firm wants to cover half of the market (assume the length of the market is normalized at a value of one), what is this firm's profit function (provide an abstract equation).
(3) Suppose a firm has two stores on Main Street, which is one mile long, and there are 10,000 customers on Main Street. However, the firm covers only 25% of Main Street. Marginal transportation cost is given by t=$80 per mile round trip. The average production cost of the product sold is given by c=$35. Customers value each unit of our store's product at V=$50. Store set-up cost equals F=$2,500.
(a) Calculate the maximum price the form can charge (b) Calculate the firm's profit
(4) What is the profit-maximizing number of stores (n) for a company that only covers 50% of the market. Provide an abstract equation.
(5) Suppose the price function on a monopolistic market is given by P=20-Q/100z, where z denotes an index of quality. The monopolist's cost function is given as C=1+0.9z2.
(a) How do increases in product quality z affect the demand curve and the infra-marginal and the marginal consumer?
(b) Calculate the profit-maximizing output, price and the profit-maximizing quality level. First, solve for quantity. Then solve for quality.
(6) A price-discrimination monopolist with 5 outlets delivers his product to any point in the U.S. at a fixed price. The market comprises 300m consumers and travel cost (shipping cost) equals $0.005 per mile of distance. Fixed set up cost per outlet equals $460,000; consumers' WTP is unknown. Calculate the overall shipping cost incurred by
the monopolist.
(7) Bundling. True or False?
a) A consumer will buy only good 1 if p1<p2 and R1+R2<pB
b) A consumer will not buy anything if R1+R2<pB and R2<p2
c) If R1+R2>pB the consumer will always buy the bundle
d) If R1+R2<pB the consumer will never buy the bundle
e) Even if R1+R2<pB and R1>p1 the consumer may still buy the bundle.
|
Which are denominated in dollars
: Home's currency is the peso and trades at 1 peso per dollar. Home has external assets of $200 billion, all of which are denominated in dollars. It has external liabilities of $400 billion, 75% of which are denominated in dollars.
|
|
Problem with a lack of upward mobility
: A client has asked you to help them retain talented workers. They are facing high turnover in their engineering departments. They are unsure what is creating this problem but exit interviews with the engineers have indicated that there may be a ..
|
|
Signaling suppose that both employees and employers view gpa
: Signaling Suppose that both employees and employers view GPA as a signal of quality. Suppose that with no effort, each earns a 2.7 GPA. The opportunity cost for a high-skilled worker to improve his/her GPA is $6,000 per 0.1 points.
|
|
Find the annual salary of 3 union presidents
: 1-Find the annual salary of 3 union presidents. How does this compare to the average annual salary of the rank and file member? Why might the union justify this discrepancy?
|
|
Suppose a store is located in the middle of main street
: (1) Suppose a store is located in the middle of Main Street, which is one mile long. Marginal transportation cost is given by t=$80 per mile round trip. The average production cost of the product sold is given by c=$32. Customers value each un..
|
|
The opportunity to investigate the social world
: These assignments are designed to provide students with the opportunity to investigate the social world around them using a sociological lens and to apply the course concepts and readings to better understand social issues. For this assignment,..
|
|
The current situation without the proposed surcharge
: The current situation without the proposed surcharge.• Present the results of your calculations in an understandable and non-mathematicalway. Without unnecessary mathematical jargon and equations
|
|
Managers are justified in monitoring employees to degree
: Some recent studies indicate that nine out of ten employers observe the electronic behavior of their employees, from tracking their Web-surfing habits to implanting GPS tracking chips in their arms. Discuss whether managers are justified in mon..
|
|
Write out equations for marginal cost mc
: Write out equations for marginal cost (MC), average total cost (ATC), and average variable cost (AVC), and show these on a properly-labeled graph.
|