You are considering buying Firm A. The current value of Firm A is V. You do not know V, but you do know that 0 2. positive, provided that s > 1.5. O positive, for any value of s. N O positive, provided that s > 1. O, for any value of s.
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- Suppose that you decide to play a game. You buy stockby throwing a dice a few times, using that method toselect which stock to buy. After ten months you calculate the return on your investment and the return earned bysomeone who followed “expert” advice during the sameperiod. If both returns are similar, would this constitute evidence in favor of or against the efficient markethypothesis?Suppose we have another firm known as the Sanda Corporation which makes a product known as "Delgados". Suppose that its FC=$2,000 and its TC=$5,000 and its AVC=$48. What is the ATC? O $20.50 O $70 O $80 O $100 O Not enough informationa) Derive a bid-rent function for a "typical" firm. Draw a graph of the bid-rent function that is clearly labeled, including any intercepts or slopes.b) For a typical city, discuss what types of firms you are likely to see closest to downtown, and what types of firms you are likely to see further away. Do these firm locationsfit the model? Why or why not?c) Are these firms likely to change locations after covid? Why or why not?.
- 4. Suppose we have another firm known as Sepanyan Corporation which makes a product known as Yeghias. Suppose the firm’s FC=$8,000 and its TC=$10,000 and its AVC=$5. What is the ATC? a) $25.00 b) $67.50 c) $100.25 d) $200 e) Not enough information 5. Which of the following is true concerning a competitive firm? a) It will produce even when its economic profit is zero b) It prefers not to maximize profits c)t is the only firm in the market d) Its quantity choice will affect the market price e) People’s PED for the firm’s specific product is inelasticAn investment club has set a goal of earning 15% on the money it invests in stocks. The members are considering purchasing three possible stocks, with their cost per share (in dollars) and their projected growth per share (in dollars) summarized in the following table. (Let x = computer shares, y = utility shares, and z = retail shares.) Stocks Computer (x) Utility (y) Retail (z) Cost/share 30 44 26 Growth/share 6.00 6.00 2.40 (a) If they have $392,000 to invest, how many shares of each stock should they buy to meet their goal? (If there are infinitely many solutions, express your answers in terms of z as in Example 3.) (x, y, z) = ? (b) If they buy 700 shares of retail stock, how many shares of the other stocks should they buy? computer ? shares utility ? shares What if they buy 1400 shares of retail stock? computer ? shares utility ? shares (c) What is the minimum number of shares of computer stock they should buy?? sharesWhat is the…2. In the following matrix for the profits of two dry cleaners with the decision whether or not to offer discounts for regular customers. What do expect to happen? Why? Note: they cannot collude You don't offer discount You offer discount Rival doesn't offer discount Rival gets $2000 You get $2000 Rival gets $1000 You get $6000 Rival offers discount Rival gets $6000 You get $1000 Rival gets $5000 You get $5000
- Suppose that over the short run (say the next 5 years), demand for OPEC oil is given by P = 165 – 2.5q. Here q is measured in millions of barrels a day. OPEC marginal cost per barrel is $15. What is OPEC’s optimal level of production? What is the prevailing price of oil at that level? Many experts contend that maximizing short-run profit is counterproductive for OPEC in the long run because high price reduces buyers to conserve energy and spur competition and new exploration that increases the overall supply of oil. Suppose that the demand curve just described will remain unchanged only if oil prices stabilize at $65 per barrel or below. If oil price exceeds this threshold, long run demand (over a second five year-period) will be curtailed to P = 135 – 2.5q. OPEC seeks to maximize its total profit over the next decade. What is the optimum output and price policy? (assume all values are present values)Assume the cost of producing the goods is zero and each consumer will purchase each good as long as the price is less than or equal to value. Consumer values are the entries in the table. Good X Consumer A Consumer B $3,300 $2,900 Good Y $2,500 $3,400 What is the company's total profit from selling the goods bundled together? OA. $12,600 OB. $10,800 O C. $11.600 OD. $13,400Suppose 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. Explain why it could still be worthwhile to purchase an advertisement, even though you know in advancethat your company would lose $1.5 million in profit
- 1 Is it possible for a firm to experience both increasing and diminishing returns at the same time? 2 What other firms, in other industries, might be in similar situations to Microsoft, and in what respects? 3 What is the nature of the fixed factor that is causing the law of diminishing returns in Microsoft’s case? 4 Are there any ways in which Microsoft can reduce the undesirable effects of the law of diminishing returns?Refer to the above table . The model will produce ( operate ) in which of the following outcomes : O a . Profit Maximizing case O b . Loss Minimizing case O C . Shut Down case O d . both Loss Minimizing and Shut Down caseSuppose for a single firm thatP = 15TC = 3Q + 2Q2 (a) What is the profit-maximizing quantity? (b) What is the profit at the profit-maximizing quantity? Only typed Answer