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Gillette's shareholders, Chairman and CEO James Kilts indicated, "Despite several new product launches, Gillette's advertising-to-sales declined dramatically . . . to 5.5 percent last year. Gillette's advertising spending, in fact, is one of the lowest in our peer group of consumer product companies."
If the elasticity of demand for Gillette's consumer products is similar to other firms in its peer group (which averages -3.5), what is Gillette's advertising elasticity?
Assume the military bureaucracy consistently misinforms Congress on total costs of producing military hardware. Suppose that it underestimates the actual costs and that the political representatives believe these estimates.
Use an indifference curve-budget line analysis to depict the situations, prior to the ban on smoking, of a student who smoked on campus, and of a student who did not smoke.
Calculate the equilibrium price and quantity that will prevail in a free market and calculate the price elasticity of demand and the price elasticity of supply at the equilibrium.
Suppose the market discount rate is 20% instead of 5%. Should he now charge the limit price to deter entry or accept the entry? Assume his goal is maximize the PV of long-run profits.
Evaulate the price elasticity of demand for subway rides. The subway fare in your town has just been increased from the current level of 50 cents to $1.00 per ride.
At present international management at PM corporation consists of one person. Determine what specific management principles and practices should PM firm start to put in place
Describe the difference between short run and long run as they are used in economics. Differentiate between Economics of scale and Diseconomies of scale.
Curly's Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $33,000 per year forever.
How does competition affect profits and prices? What causes some firms to enter an industry, and others to leave it?
Discuss how does the existence of money decrease the expenses of making transactions, relative to a society based entirely on barter?
What is the machine's payback period? Compute net present value of machine if the cost of capital is 12%. Find out the expected internal rate of return for this machine?
An economist for the widget company estimated following short term production function. Compute the AP and MP mathematically and identify the three stages.
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