--%>
Assignment Help - homework help

Problem on effect of a price decrease on total revenue

1. Is it possible for any country to have made gains in access (at the expense of quality) of their rural healthcare system, without any gains in efficiency?  Explain using a PPF diagram.

2. If the own price elasticity for a good is -2.5, what is the likely effect of a price decrease on total revenue?

3. You’ve been asked to assess two alternatives to regulating a monopoly using a ceiling price. Option A is to set the ceiling price 25% below the monopolist’s equilibrium price. Option B is to set the ceiling price 50% below the monopolist’s equilibrium price. Assume your only concern is the efficiency consequences under each option. Which option is preferable? Explain.

   Related Questions in Microeconomics

  • Q : Explain an example of price

    A Ferris wheel operator at the county fair charges of $2 per ride. Individual seat is vacant on what will be the final ride of the day. He asks when you would like a ride for a dollar. It is an illustration of: (1) reservation pricing. (2) price discrimination. (3) as

    		•
  • Q : Problem Based on Economic Rent Location

    Location or site rents are as: (w) unrelated to the geographic location of a firm in a market. (x) determined from the fertility of land. (y) generated while a firm’s location allows this to charge more for its output or to pay less for its inpu

    		•
  • Q : Claimants to a firms income stream The

    The least probable of the given to be claimants to the firm’s income stream would be the firm’s: (1) Shareholders. (2) Managers. (3) Customers. (4) Suppliers. (5) Government. Can someone please help me in finding out th

    		•
  • Q : Price taker and a quantity adjuster

    When the world price for this year’s wheat crop is $10 per bushel, and Del, a profit maximizer one who owns the biggest wheat farm within North Dakota: (i) is a quantity taker and a price adjuster. (ii) cannot generate an economic profit into th

    		•
  • Q : Vigorous competition in long run market

    Vigorous competition into a market depends in the long run most strongly upon the: (w) number of buyers and sellers presently in the market. (x) freedom to enter and exit the market. (y) sizes of the average firm within the market. (z) uniformity [hom

    		•
  • Q : Positively sloped demand curve of

    When your income is positively and closely tied to the price of a specific product, a raise in its price might cause: (1) The income effect which, in severe conditions, yields a positively sloped demand curve. (2) You to go bankrupt. (3) The powerful positive substitu

    		•
  • Q : Productivity related problem Other

    Other things equal, an improvement in productivity will: A) shift the aggregate demand curve to the left. B) shift the aggregate supply curve to the left. C) shift the aggregate supply curve to the right. D) increase the price level.

    		•
  • Q : Exhibiting Predatory Behavior If a firm

    If a firm attempts to drive rivals from its market and after that raises prices and adopts a strategy to deter entry, this is exhibiting: (w) grim strategy. (x) tit-for-tat strategy. (y) predatory behavior. (z) Nash equilibrium.

    Q : Problem regarding Labor Union Goals The

    The union goal of maximum employment would make most of the union members: (1) Happy as unemployment rates would be zero. (2) Happy since of the big union membership. (3) Unhappy as only a very low wage maximizes employment. (4) Unhappy as they don’t understand

    		•
  • Q : Simulated demand A department store

    A department store faces a decision for a seasonal product for which demand can be high, medium or low. The purchaser can order 1, 2 or 3 lots of this product before the season begins but cannot reorder later. Profit projections (in thousands of euro) are shown below:

    		•