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Consider a copy shop with annualized fixed costs of $1000 and variable cost of $0.03 per page. The shop presently has orders for 100,000 copies at a price of $0.05 per page. A new customer approach the shop with an order of 10,000 copies, but will pay only $0.035 per page.
(a) What is the shop’s average cost (AC) without taking the new order? Is it less than the product price?
(b) What is the shop’s average cost (AC) if it does take this order? Is it less than or greater than the price for the new order? Should this be the criteria for deciding whether to take the new order?
(c) If not, what is the appropriate criterion for taking the order? Explain.
Suppose the S&P index is expected to fall by 1 percent over the next month. What is the expected return on PepsiCo's stock?
A proposal has been made for improving the downtown area of a small town. The plan calls for banning vehicular traffic on the main street and turning this street into a pedestrian mall with tree plantings and other beautification features.
What is meant by absolute advantages and comparative advantages? What are the differences between the two?
You have been chosen to create an e-commerce program to the board of directors. Present your argument on why senior management should buy into your e-commerce program.
the mainstream theory of the business cycle, is the most common source of reciession: a decrease in aggregate demand, a decrease in aggregate supply, or both.
Elucidate what would the seller's cost of capital have to be in order for the discount to be cost justified.
Suppose it costs $30 for each lobster trap set. Lobsters sell for $15. If X traps are set, the harvest rate of lobsters, L, as a function of the number of traps, is given by: L = 45 X –X2. With no restrictions on the number of traps, and open access ..
Suppose that a person always consumes 3 scoops of ice cream with 1 ice cream cone. Show such preferences in an indifference curve mapping with ice cream cones on the x-axis.
The text noted that money performs three basic functions. Select one of these functions and describe the ways rapid inflation could undermine money's ability to perform the function you selected.
Should we remove all barriers to immigration into the United States? What would be the outcome? If we could let in an extra hundred thousand immigrants every year, should we favor certain immigrants over others? Why?
Explain how would Ford Moter Company use price Elasticity of demand to determine whether to increase or decrease the price.
Suppose that an automobile costs $30,000 in the United States and 25,000 Euros in France. Further suppose that the exchange rate is .8 (one US dollar = .8 Euros).
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