Reference no: EM13244775
Consider whether a firm with fixed costs is subject to market failure by following the stepsbelow:
a. Suppose there are N people who might consumer a product sold by a monopoly firm. Each person hasdemand of q = 2 -P, so total demand for this product is Q= Nq = 2N- NP, or P = 2 - Q/N.Graph this market demand curve.
b. For this marketdemand curve, the equation for marginal revenue is MR = 2-2Q/N. Add thismarginal revenue curve to your graph.
c. Suppose themarginal cost of production is zero. What quantity would aprofit maximizing monopolistproduce? What price would it charge? Show this on your graph.
d. Ignoring fixedcosts, calculate profits, consumer surplus, and total surplus at this profit maximizingprice. (These will be functions of N).
e. Suppose now thatbefore making this product, the firm has to pay fixed costs of research anddevelopment equal to $3,000,000. How large does N need to be before theprofit-maximizing firm chooses to pay the fixed cost and produce this product? How largedoes N need to be before it is socially efficient to pay the fixed cost?
Influences stock buyback programs
: Companies that are smart and conservative about their buybacks are not just creating value by maximizing float reduction, but they are also signaling to investors that they are likely well managed in other ways
|
Explain the molar mass for kclo3
: Determine the volume of 02 (at STP) formed when 50.0g of KClO3 cedomposes according to the following reaction. The molar mass for KClO3 is 122.55g/mol. 2KClO3(s)-->2KCl(s)+3O2(g)
|
Explain contents of tese two syringes
: A sytringe contains 589 mL of CO at 325K and 1.2 atm pressure. A second sytringe contains 473mL of n2 at 298K and 2.6atm. What is the final pressure if the contents of tese two syringes are injected into a 1.00L container at STP
|
Provide a correlation matrix of these three variables
: To get a sense of the data, provide two well labeled scatter-plots of 1) revenue vs. budget, and 2) revenue vs. screens. Also, provide a correlation matrix of these three variables
|
What quantity would aprofit maximizing monopolist produce
: Suppose now thatbefore making this product, the firm has to pay fixed costs of research anddevelopment equal to $3,000,000. How large does N need to be before theprofit-maximizing firm chooses to pay the fixed cost
|
What is the smallest value of the incident angle theta
: A flat piece of glass covers the top of a vertical cylinder that is completely filled with water, What is the smallest value of the incident angle theta_a for which none of the ray refracts into the water
|
An analyst with river investment
: David Wright CEA. An analyst with River Investment is considering buying a Montrose Cable Company corporate bond.
|
Explain what is the pressure of co
: A mixture of .220 moles CO, .350 moles H2 and .640 moles He has a total pressure of 2.95 atm. What is the pressure of CO
|
The subjective nature of the cf estimates
: Often DCF(discounted cash flow) approaches to valuation are unattractive because of the subjective nature of the CF estimates. In industries where "standard" Valuation multiples are available, they are an alternative to DCF analysis. Consider the fol..
|