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Leasing Residuals In the late 1990's, care leasing was very popular in the United States. A customer would lease a car from the manufacturer for a set term, usually two years, and then have the option of keeping the care. If the customer decided to keep the car, the customer would pay a price to the manufacturer, the "residual value", computed as 60% of the new care price. The manufacturer would then sell the returned cars at auction. In 1999, the manufacturer lost an average of $480 on each returned car (the auction price was on average, $480 less than the residual value). a. Why was the manufacturer losing money on this program? b. What should the manufacturer do to stop losing money?
What can you determine about consumer demand for your product from this information.
Based on the revised (1997) merger guidelines, would the Antitrust Division likely challenge a proposed merger between.
Illustrate wwhat is the effect on the market for one hour of babysitting services in Middling today.
In which direction will the scale effect change the firm’s employment of labor? c. Can you say conclusively whether the firm will use more or less labor? More or less capital?
Identify at least three such factors that, in your view, should be included in the GDP calculations; then elucidate and illustrate how could they will help to improve the GDP as a tool for measuring the well-being of a nation.
This might be interpreted as an upward shift in the consumption function. Elucidate how does this shift affect investment and the interest rate.
Explain how does the subsidy affect consumer surplus, producer surplus, tax revenue, and total surplus. Does a subsidy lead to a deadweight loss. Explain
Elucidate how each of the following people would talk about scarcity and trade offs.
If farmers were to decry the effect of this new technology on the price of milk and lobby government to set the price of milk at the price before the invention, elucidate the result.
How do you recover an investment when the residual value is significantly less than the loan value.
The payoff matrix of economic profits above displays the possible outcomes for Bob and Jane who are involved in game of whether or not to advertise.
Can you find a Nash equilibrium in pure strategies that is not efficient. Find the sub game perfect equilibrium as a function.
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