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The second unit of a good gives less satisfaction to a consumer. This is clearly a case of diminishing returns.
True/False
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- The overall effect of advertising on economic efficiency is a) positive, since it tends to lead to increased sales. b) indeterminate, since it leads to increased excess capacity but may also guide consumers to better decisions. c) negative, since it utilizes resources that could otherwise be used to expand production. d) Advertising is not important for efficiency.A firm with market power has an individual consumer demand of Q = 10 − P and total costs of C = 2Q. What is the optimal amount of this product to package in a single block? Multiple Choice 6 2 4 8Company X has been unable to keep up with customer demands for product Y. They are considering two options. The first is to replace the existing tooling machine with a new machine or start a second shift to increase throughput. The cost of the new machine is $500,000. The cost of ramping up the second shift is 150,000. With the new machine option, there is a 60 percent opportunity of generating 750,000 in revenue. There is also a 40 percent opportunity of making $200 in revenue. With the second shift option, there is a 50 percent opportunity to generate $400,000 of revenue and a 50 percent opportunity to generate $100,000 of revenue. Which option would you recommend?
- Joe's search costs are $5 per search. He wants to buy a smart watch for his wife for Christmas, and the lowest price he's found so far is $300. Joe thinks 80 percent of the stores charge $300 for smart watches and 20 percent charge $200. Joe's optimal decision is to Multiple Choice continue to search for a lower price since the expected benefit of an additional search is $20, which exceeds his per-unit search costs. continue to search for a lower price since the expected benefit of an additional search is $80, which exceeds his per-unit search costs. stop searching and purchase a video player for $300. continue to search for a lower price since the expected benefit of an additional search is $100, which exceeds his per-unit search costs.Based on market of product A, with demand function as Q = 300-2P, and the supply given as Q = 2P-60The demand function for FreshFood Exclusive Brand's product is D = 80 - 2p , where D is the number of units and 'p' is the price per unit. The value of D that will achieve maximum revenue is __________________.
- Maximizing total revenue is the same as maximizing profit is this true or falseLeopard golf clubs usually sell for $1300. At this price, the retailer can sell on average 20 sets per week. For every $50 reduction in price, sales of the golf increase by two sets per week. Similarly, for every $50 increase in price, sales decrease by two sets per week. Determine the optimum price to maximize revenue.An automobile dealership offers to fill the four tires of your new car with 100% nitrogen for a cost of $20. The dealership claims that nitrogen-filled tires run cooler than those filled with compressed air, and they advertise that nitrogen extends tire mileage (life) by 25%. If new tires cost $50 each and are guaranteed to get 50,000 miles (filled with air) before they require replacement, is the dealership’s offer a good deal?
- Is the following statement true or false: “Customers prefer product A more than product B if the customer value of product A is less than the customer value of product B." Group of answer choices False TrueMaximize the following total revenue TR=-Q2+120Q by finding the critical value(s), testing the second-order conditions, and calculating the maximum total revenue.“Competition among firms promotes operational efficiency, and production of goods that the consumers value.” Agree or disagree with this statement. Please provide a rationale for either option.
