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Find the highest interest rate:
There are 2 entrepreneurs, Sally and Paul. The return to their projects are given by:
To finance the project, each entrepreneur needs to borrow from a bank an initial capital of 100. The loan contract stipulates that if the project return is high, then the firms pays principal plus interests, and if the project return is low, then the bank seizes whatever value that the firm has left over. Find the highest interest rate at which Sally is willing to borrow, the highest interest rate at which Paul is willing to borrow, and the bank's expected net profit if the interest rate is 10% and 18%, respectively.
Is it possible for a firm to be both Price taker and price maker? A firm can either be a price taker or a price maker. It cannot be price maker and price taker at the similar
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Solution of this case study
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Q. Define Migration in Microeconomics? Migration:It's the movement of human beings from one country or region to another. Sometimes migration is motivated by economic factors (
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