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A firm can produce steel with or without a filter on its smokestack. If it produces without a filter, the external costs on the community are $500,000 per year. If it produces with a filter, there are no external costs on the community, and the firm will incur an annual fixed cost of $300,000 for the filter. a) Use the Coase Theorem to explain how costless bargaining will lead to a socially efficient outcome, regardless of whether the property rights are owned by the community or the producer.b) How would your answer to part (a) change if the extra yearly fixed cost of the filter were $600,000?
Q. Explain Maximising revenue method? In a number of cases, a firm's demand and cost conditions are such that marginal profits are greater than zero for all levels of productio
classification of costs
Increase in demand SS is the supply curve and D 1 D 1 the initial demand curve shifts to the right, to position D 2 D 2 . P 1 is the initial equilibrium price and q 1
A study of 86 savings and loan associations in six northwestern states yielded the following cost function. I''ve been given the following data; C=2.38- .006153Q1 + .000005359Q2 +
Disadvantages The effect on incentives High progressive tax makes work and extra effort become less valuable. The effect on the willingness to accept risk
Question: i) Briefly explain the importance of forecasting for managers? ii) To what extent will managers rely on surveys in business forecasting? iii) What do you mea
Q. Explain the Short run production function? Discussion of production up to now has ignored the time required to build production facilities. There is a requirement to take in
In the city of Gelato the market for ice cream is perfectly competitive. Aggregate demand for ice cream is: where p is the price for one cone of ice cream. All ice cream pr
Barriers to entry in pure oligopoly The barriers to entry can be artificial or natural. Artificial Barriers This can be acquired through: State protection throu
Environmental issues factors This is governed by the below factors: The type of economic system of the country Business cycles Industrial policy of the countr
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