19. Druid city is currently selling Lamplighter IPA in their taproom for 2, the marginal cost of producing its beer is 1. They are considering raising the price to 4, what percentage of sales must be maintained to ensure that Druid City at least stays even with the proposed price increases.
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- Suppose now that the government decides to increase the number of quotas available to 72 units, but keeps the price support at the current level of $72. calculate the consumer surplus the producer surplus Deadweight loss which if the two options would be preferred by the producers? which of the two options would be preferred by a society as a whole?A multinational corporation is considering starting a subsidiary in an Asiancountry. Management realizes that the success of the new subsidiary depends, in part,on the ensuing political climate in the target country. Management estimates that theprobability of success (in terms of resulting revenues of the subsidiary during its firstyear of operation) is 0.55 if the prevailing political situation is favorable, 0.30 if thepolitical situation is neutral, and 0.10 if the political situation during the year is unfavorable. Management further believes that the probabilities of favorable, neutral, andunfavorable political situations are 0.6, 0.2, and 0.2, respectively. What is the successprobability of the new subsidiary?Sandhill Company completes and transfers out 13,720 units and has 1,960 units of ending work in process that are 25% complete as to conversion costs. Materials are entered at the beginning of the process, and there is no beginning work in process. Assuming unit. materials costs of $3 and unit conversion costs of $5 , what are the costs to be assigned to units (a) completed and transferred out and (b) in ending workingrocess?
- Gulf Coast Electronics is ready to award contracts to suppliers for providing reservoir capacitors for use in its electronic devices. For the past several years, Gulf Coast Electronics has relied on two suppliers for its reservoir capacitors: Able Controls and Lyshenko Industries. A new firm, Boston Components, inquired into the possibility of providing a portion of the reservoir capacitors needed by Gulf Coast. The quality of products provided by Lyshenko Industries has been extremely high; in fact, only 0.5% of the capacitors provided by Lyshenko had to be discarded because of quality problems. Able Controls has also had a high quality level historically, producing an average of only 1% unacceptable capacitors. Because Gulf Coast Electronics has had no experience with Boston Components, it estimated Boston’s defective rate to be 10%. Gulf Coast would like to determine how many reservoir capacitors should be ordered from each firm to obtain 75,000 acceptable-quality capacitors to use…43. The U.S. government wants to determine whetherimmigrants should be tested for a contagious disease,and it is planning to base this decision on financialconsiderations. Assume that each immigrant who isallowed to enter the United States and has the diseasecosts the country $100,000. Also, assume that eachimmigrant who is allowed to enter the United Statesand does not have the disease will contribute $10,000to the national economy. Finally, assume that x percentof all potential immigrants have the disease. The U.S.government can choose to admit all immigrants, admitno immigrants, or test immigrants for the diseasebefore determining whether they should be admitted. Itcosts T dollars to test a person for the disease, and thetest result is either positive or negative. A person who does not have the disease always tests negative. However, 10% of all people who do have the disease testnegative. The government’s goal is to maximize theexpected net financial benefits per potential…Suppose a manufacturer and its retailer face the problem of double marginalization described in my notes, Section 11.1. If the manufacturer sets the wholesale price equal to its marginal cost c and in addition, requires the retailer to pay a fraction α (between 0 and 1) of its profit. 4.a Write down the retailer’s profit maximization problem. Will this practice solve the double marginalization problem? (That is, will this practice maximize their joint profit?) 4.b Suppose the retailer is required to pay a fraction of α of its sales (i.e., total revenue). Write down the retailer’s profit maximization problem. Will this practice solve the double marginalization problem? I am posting chaper 11.1 notes below:
- Suggest at least one consumer good or service for which in the last 10 to 15 years consumers preference has actually increased, and still, the price has decreased. Than discuss the possible reasons for the decrease in the price of the suggested good or service.2- A multimedia company anticipates that there will be a demand for 20,000 copies of acertain DVD during the next year. It costs the company $0.40 to store a DVD for oneyear. Each time it must make additional DVDs, it costs $250 to set up the equipment.How many DVDs should the company make during each production run to minimize itstotal storage and setup costs?Consider the market depicted in the graph and assume the government imposes a price floor of P2. At P2, 150 units of the good are supplied (wish to be sold) and 50 units of the good are demanded (wish to be bought). Choose the correct ones: Without an enforcement mechanism, the effect of a binding price floor will be negligible because it will simply be ignored because buyers and sellers enrich themselves by trading below the floor price. With an enforcement mechanism, the effect of a binding price floor may still be negligible if the enforcement mechanism is easy to evade or doesn't impose a significant penalty for selling below the price floor. Without an enforcement mechanism, the effect of a binding price floor will be negligible because it will simply be ignored because buyers and sellers enrich themselves by trading above the floor price. With an enforcement mechanism, the effect of a binding price floor may still be negligible if the enforcement mechanism is easy to evade or…
- The following graph shows the labor market for research assistants in the fictional country of Collegia. The equilibrium wage is $10 per hour, and the equilibrium number of research assistants is 200. Suppose the government has decided to institute a $2-per-hour payroll tax on research assistants and is trying to determine whether the tax should be levied on the employer, the workers, or both (such that half the tax is collected from each side). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor demanded. You will not be…If the daily availability of M1 and M2 are 30 tonnes and 12 tonnes respectively in the Reddy Mikks problem, what would be their shadow prices?Mr. Albert Richardson, a financial advisor at NNW Investments identified two companies that are likely candidates for a takeover in the near future. East End Cable is a leading manufacturer of flexible cable systems used in the construction industry, and CampSwitch is a new firm specializing in digital switching systems. East End Cable is currently trading at $40 per share, and CampSwitch is currently trading at $25 per share. If the takeovers occur, Mr. Richardson estimates that the price of East End Cable will go to $55 per share and CampSwitch will go to $43 per share. At this point in time, Mr. Richardson has identified CampSwitch as the higher-risk alternative. Assume that a client has indicated a willingness to invest a maximum of $50,000.00 in the two companies. The client wants to invest at least $15,000.00 in East End Cable and at least 10,000.00 in CampSwitch. Because of the high risk associated with CampSwitch, Mr. Richardson has recommended that at most $25,000.00 should be…