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Suppose the monopoly has a constant marginal cost of 0 and can sell its good to two different groups of customers. One group of "poor" has demand function P = 1.5 - Q; the other - equally large group of "rich" has demand: P = 2 - Q. The seller cannot tell whether a particular consumer is rich or poor, but she knows that there is equal number of both types.
a. What is the optimal pair of two-part tariffs: the pairs Fr - the entry fee and pr - the price per unit that monopoly intends for the rich guy and Fp - the entry fee and pp - the price per unit that monopoly intends for the poor guy?
According to the rule of 70 and 72, a 10% annual increase in real GDP would lead to doubling of real gdp in how many years? According to the future value calculation: an individual and his wife want to retire at 62 on his birthday. Greg just celebrat..
You face a market of 30,000 buyers divided into 2 segments (A and B). The two segments are potentially different. From each segment you have picked a random sample and offered them a price. Assume that the demand curve(s), as usual, is a straight lin..
Which one of the following items about Theory of Constraints is TRUE?
Plot the demand and supply curves. Describe the tax incidence- how much of the tax is paid by consumers and how much is paid by producers? Calculate the dollar value of consumer surplus, producer surplus, government revenue, and deadweight loss after..
If a monopolist is producing a level of output at which demand is inelastic, the firm is not maximizing profits, and increasing output will decrease total revenue.
With the help of appropriate figure, explain the conditions for Pareto efficiency. Show how the Utility Possibility frontier (UPF) can be derived from the Pareto efficient allocations.
In general, large current account deficits have to finance by:
The article touches on two crucial conditions for a fiscal stimulus to work.
Which of the following statements best describes the concept of a binding price floor. Suppose that the equillibrium price of donuts is $1.00 per donut.
In the former Soviet Union, producers were paid for meeting output targets, not for selling products. Under those circumstances.
1. Describe Differential analysis to drop/keep customers 2. Describe Differential analysis regarding product line offerings
What possible effect does investment in excess capacity by incumbents have in determining the extent to which investments by entrants are sunk?
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