Q: West Central State College is making holiday wreaths to raise money for a homeless shelter. From…
A: Given,
Q: Life insurance policies typically have clauses stipulating the insurance company will not pay claims…
A: An Insurance policy using such clause because of Asymmetric Information in the market. Following are…
Q: Explain mathematically (a) Why MR=MC is the profit-maximizing decision? (b) Why MR > MC and MR <…
A:
Q: What is the difference between bargaining with symmetric and asymmetric impatience?
A: When group of individuals or individuals negotiate over the contract terms then the process is known…
Q: Suppose Jay has been experiencing back pain and that there are two options for back pain: Treatment…
A: The incremental cost effectiveness ratio is used as a decision-making tool for the purpose of…
Q: Your firm’s research department has estimated your total revenues to be R(Q) = 30, 000Q − 80Q2 and…
A: Total revenue: Total income is the measure of cash that an organization procures by selling its…
Q: Suppose P(x) represents the profit on the sale of x Blu-ray discs. If P(1,000) = 4,000 and…
A: The firms always work towards achieving their objective of maximizing their profits and a firm…
Q: Q)What are some reasons that health care markets may not be perfectly competitive? a. Many types…
A: A perfectly competitive firm is characterized by five factors: 1. Infinite number of buyers and…
Q: What impact do asymmetric and imperfect information have on prices and quantities? Group of answer…
A: Demand and Supply Demand refers to the number of commodities that the buyers are ready to buy at…
Q: Suppose ABC Corp. spends $300,000 per year on some basic level of advertising, regardless of its…
A: The markets are the place where the buyers of the products, and the sellers, or the producers of the…
Q: Explain how utility could be used in a decision where performance is not measured by monetary value.
A: Utility is resisted as a term used to portray the fulfillment an individual gets from the…
Q: Prove that price effect and income effect can be broken into income and substitution effect. Explain…
A: Consumers will migrate to a new equilibrium position at a higher indifference curve as the price of…
Q: Let g (D, y) be the profit when the order quantity is y and the demand is D. In the newsvendor…
A: Given information Profit function= g(D,y) here D=Demand y=order quantity
Q: Which of the following is NOT one of the four steps for making good strategic decisions? A. Assume…
A: A. This is correct option. Strategy Should be based on your own actions,others action can't be the…
Q: Why is imperfect information a problem in market economies? Give a current example of how imperfect…
A: In economics, a market is considered as efficient when it is operated at the equilibrium level that…
Q: It is common that firms and consumers have limited information about prices, quality, and other…
A: When sellers tend to possess more information about the quality of the product as compared to the…
Q: The problem of adverse selection in insurance markets means that it is generally a bad deal for…
A: Adverse selection refers to any circumstance in which one party to a contract or negotiation, such…
Q: After viewing the film Back to the Future, Matt takes a nap but has a disturbing dream. He sees…
A: In the short run, even though a firm is facing loss, it can continue the production if the price is…
Q: Discuss the concept of stationarity. What is the difference between strong and weak stationarity?…
A: Stationarity is a process of Time series and is used in regression to analyze the stationarity of…
Q: A plane from Cairo to Riyadh is about to take off, but it still has a few seats empty. If the…
A: Average cost(AC) is the cost(C) of ‘each unit during production’. It is calculated as total cost(TC)…
Q: What are some examples of loss aversion in everyday life? (i.e how do we experience loss aversion…
A: The loss aversion would result in the avoiding loss which from an uncertain activity. The loss…
Q: A used car dealership rents 210 cars for $9 a day. They want to increase the price to maximize their…
A: Profit maximizing refers to a scenario at which a firm is getting maximum profit at producing at a…
Q: QH: Use the demand function D(p)=(p-10)^2 * (p+10)^2 for p values between 0 and 10. Suppose there is…
A: Answer -
Q: The market for lemon has 10 potential consumers, each having an individual demand curve P=101-10Q1,…
A: Solution: The individual market demand curve is P=201-10Q1 The market demand is the sum is total of…
Q: A shoe store is offering shoes that regularly sell for $80.00 at a 25% discount. Halfway through the…
A: Answer: Current price = $80 Discount percent = 25% Discount amount=80×25100Discount amount=$20 New…
Q: It is generally agreed that unrestricted price competition among insurers could be detrimental to…
A: As per my point of view towards the competition and no competition. Putting price competition make…
Q: Qs = 89830 -40PS +20PX +15PY +2I +.001A +10W Are X’s sailboats a substitute for or complementary…
A: In a market, two or more goods can be related to each other either directly or indirectly such that…
Q: When a retailer is considering whether to participate in Apple Pay, is the decision process like a…
A: The process by which a business advertises the acquisition or sale of a good, service, or commodity…
Q: What pricing strategy is best for manufacturing smartphones? For instance, skimming pricing strategy…
A: Pricing is significant because it establishes the value of your product for both you and your…
Q: Profit is maximum when
A: To find : When will be profit maximum.
Q: Watch the video, and in your own words, explain why planning is so important to managers. Long term…
A: Planning is refer to the achieving and including in the long term and short term business goals,…
Q: What is the likelihood that firms would enter the market in the short-run? Use COVID-19 as a market…
A: The firms in the market would always want to earn positive economic profits in the short run after…
Q: Which one applies to an impatient individual? Have high discount factors Have low discount rates…
A: The impatient individual is who reacts immediately to anything. They take decisions immediately…
Q: You are in the market for a new couch and havefound two advertisements for the kind of couchyou want…
A: We define willingness to accept as the minimum amount that a person would be willing to accept to…
Q: Which of the below statements DOES NOT FIT IN with what Wheelan wrote in In chapter 7, "Financial…
A: The first statement highlights the Decision making in financial market, and how emotions can play a…
Q: Provide an intuitive explanation for why a "buy one, get one free" deal is not the same as a…
A: A buy-one-get-one-free can be much more profitable for stores than a half-price sale.
Q: Fred wants to hire Barney to manage his retail store. Barney can apply a high level of effort (at a…
A: We are going to calculate the profit ratio which will incentivise the Barney to put higher efforts.
Q: Would you say that a sacrifice represents the cost of a particular decision?
A: In opportunity cost, sacrifice plays a vital role when buying the alternative products by the…
Explain mathematically:
Why MR=MC is the profit-maximizing decision?
Why MR > MC and MR < MC cannot be profit-maximizing decisions?
Step by step
Solved in 2 steps
- Apple is famously secretive about the details of upcomingproduct launches, leaving consumers and industry insidersto speculate on the features and functions of new models.What effect might this have on demand?When a retailer is considering whether to participate in Apple Pay, is the decision process like a new-task purchase, a straight rebuy purchase, or a modified rebuy purchase? Explain your answer.Suppose you have two types of users for your software: basic users and professionals. The value each group places on your basic program and your advanced program is given in the table below. Value of Product basic users Professionals basic program $65 $60 advance program $75 $150 You don’t know who exactly your basic and professional users are. How might you price your advanced program so that only your professionals by that version and you maximize profits? Group of answer choices $144 $150 $65 $75
- Profit is the incentive that drives our market economy. Firms make production, pricing, and hiring decisions based on their quest for profit. But what happens when a firm discovers that it can make dramatically higher profits by stopping production altogether? In December 2000, due to wild swings in the market for electricity, Kaiser Aluminium faced just such a decision. Kaiser Aluminium had contracted with Bonneville power for all of its electricity needs and found itself in the unique position of being an electricity consumer and, potentially, an electricity reseller. By December 2000, Kaiser faced a difficult decision of continuing its current aluminium production and profit levels, or closing the plant to dramatically increase its profit by simply reselling its electricity. When making production decisions, firms must consider both their costs and revenues. One important concern for many firms is utility costs. In 1996, Kaiser Aluminium Corporation in Spokane, Washington, entered…Explain mathematically (a) Why MR=MC is the profit-maximizing decision? (b) Why MR > MC and MR < MC cannot be profit-maximizing decisions?Determine whether each of the statement is true, false, or uncertain. If the statement is false or uncertain, please correct the statement to make it true. If the statement is true, please explain your answer briefly. Give a brief definition of any underlined term. Economies of scale causes the long-run market supply curve to rise as price increases.
- Exercise 4.6 An econometrician hired to analyse a local golf course has determined that there are two types of golfers, the regular and the occasional. The annual demand for games from regular players is given by QH = 24 – 0.3P, where P is the price of a round of golf. On the other hand, the annual demand for occasional items is given by QO = 10 – 0.1P. The marginal cost and the average total cost per item are equal to €20. a) If you could distinguish between regular and casual players, what price would be set for each type? How many games would each type of player play? How much profit could the golf course generate? Represent graphically. b) As an alternative to the discrimination of third degree prices, those in charge consider a double tranche rate according to which the members can play as many games as they wish at a price of € 20 per game. How much profit will the golf course generate if it charges all players the same annual fee for becoming a member of the club? What if you…Why do we say that the "Rip-off," "False Economy," and "Overcharging" strategies are not market-oriented strategies? Are there instances when | any of these price positions may be justifiable? Explain.After viewing the film Back to the Future, Matt takes a nap but has a disturbing dream. He sees himself 50 years into the future, and his town has become a large city. Dozens of computer businesses exist in the city. However, he is still selling only 1200 computers a year at his store. He observes that computer prices are now $900 and his ATC is still $1000. His AVC is $750 and his AFC is $250. In a panic, Matt closes his store immediately rather than continue to lose money. Did he do the right thing? Why, or why not? Illustrate numerically to support your answer. In desperation, Matt considers raising his price back to the $1,300 that he charged in the “good old days.” Without any more information than the fact that computers now sell in a perfectly competitive market, can you tell Matt what the outcome of his price change will be? Perplexed about whether his proposed action is the right approach and uncertain about your advice, Matt calls in a consultant who tells him that he…
- What is the rule in using the marginal analysis in making the optimal decision? a. the optimal output level is the point where the marginal benefit/marginal revenue is equal to the marginal cost. b. the optimal output level is the point where the marginal benefit/marginal revenue exceeds the marginal cost c. when the marginal costs start to exceed the marginal benefits (marginal revenue), the net benefits (profits) increase. d. as long as marginal benefit (marginal revenue) is greater than marginal cost, the net benefits (profits) decreaseAccording to data from Yelp, more than 55 percent of the 132,500 businesses listed on the site that closed during the pandemic will remain shuttered permanently. Although government relief bought some companies time, businesses that are now closed will likely remain that way for the long term. Restaurants account for the greatest share of permanent and temporary closures, followed closely by retailers and then beauty salons and spas. “Businesses are needing to decide, ‘Do I renew my lease on my space for another year?’ It is really hard to make a one-year commitment to paying rent when businesses are closing down for the second time and there’s no end in sight to this virus,” said Michael Stepner, a postdoctoral researcher at Harvard University. “The longer these temporary closings go on, the more of them will turn permanent.” States that depend heavily on tourism like Hawaii and Nevada have experienced the most closures per capita. As businesses close across the country, it becomes…Suppose you manage a large company’s marketing department and are responsible for deciding whether or not to advertise in the Super Bowl. Your team of analysts estimate that for each advertisement, your firm would generate $6 million in additional revenue for the company. It cost $7 million to run a 30-second advertisement. Therefore, your company would expect to lose $1 million in profit for each advertisement. a) Explain why it could still be worthwhile to purchase an advertisement, even though you know in advance that your company would lose $1 million in profit? b)Depict this situation with a game theory payoff matrix. Your company (A) and a major competitor (B) have two potential strategies: to advertise or to not advertise during the Super Bowl. The payoffs in each cell represent the change in firm profits from advertising. Create payoffs in each cell such that the Nash equilibrium is that both firms advertise despite having a higher profit if neither firm advertised.