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Question: You are the owner of a local Honda dealership. Unlike other dealerships in the area, you take pride in your No Haggle sales policy. Last year, your dealership earned record profits of $1.7 million. In your market, you compete against two other dealers, and the market- level price elasticity of demand for midsized Honda automobiles is -1.4. In each of the last five years, your dealership has sold more midsized automobiles than any other Honda dealership in the nation. This entitled your dealership to an additional 20 percent off the manufacturer's suggested retail price (MSRP) in each year. Taking this into account, your marginal cost of a midsized automobile is $12,000. What price should you charge for a midsized automobile if you expect to maintain your record sales? Instructions: Enter your response rounded to two decimal places.
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Consider a city that has a number of hot dog stand operating throughout the downtown area. Suppose that each vendor has a marginal cost of $1.50 per hot dog sold and no fixed cost. Suppose that the maximum number of hot dogs that any one vendor..
A competitive, profit-maximizing firm will choose to hire workers up to the point where the value of the marginal product:
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Suppose that a student who is about to take a multiple choice test has only learned 40% of the material covered by the exam.Thus, there is a 40% chance that shewill know the answer to a question. However, even if she does not know the answer to a ..
A local internet provider advertises its no-time-limit service with a one-year subscription of $20 per month, two years at $11/month.
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