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LA Fatness starts the first Fatness Club in town. What is the optimum price and membership quantity? What is the profit of the business at the optimum solution?
Compare potential profits from these two pricing strategies, one price for all and two different prices for local and out of town customers and discuss reason for the differences.
Discuss the merits of these two different goals. Do you think that one goal would be favored over the other from behind a Rawlsian veil of ignorance?
Now assume that the price elasticity of demand for U.S. exports equals 2.50 and the price elasticity of demand for U.S. imports equals 1.80. Does this change the outcome? Why?
What would be the effect on D' if the fixed costs were decreased by 10% and the variable cost per unit were increased by the same percentage.
Assume that the central bank implements a monetary expansion that is fully anticipated by financial markets. This fully anticipated monetary expansion will cause which to occur?
What do you think will cause market fluctuations over the next few years as the economy struggles to recover. What areas of the economy should be closely watched as indicators of future activity?
What other reason could explain why this program is offered? Would you expect the other large electronics stores to match this program with one of their own? Why or why not?
Calculate the maximum lump-sum tax that could be imposed on producers without affecting the short-run supply of electricity.
Given the difficulties that the regulation of public utilities faces, would it not be better to nationalize public utilities, as some European countries have done? Explain.
In country A velocity is constant while in country B velocity has fallen. In which country will inflation be higher? Explain why?
Then Office Depot and Staples guarantee they will match the lower prices. Explain why this pricing policy may not be good news for consumers.
What is the annual cost of this facility to the community? Assume that the facility will have a useful life of around 15 years. The Capital recovery factor is .10380.
The small firms' supply curve is QL = P - 10 where QL is the total quantity supplied by all the smaller firms. Glyde's costs are given by TCG = 100 + 6 QG. What price should Glyde set to maximize its
The nationof "A" is "small" and unable to affect world prices. Calculate the following: The quantity of imports in the free trade equilibrium and The quota rent.
This culture follows the poor even when they move out of slums or barrios." Do you believe there is such a thing as a culture of poverty? Explain.
If the Federal reserve has set the risk-free interest rate at 8 percent, what is the proper current price of this investment?
Explain in what way the US trucking industry exemplified the capture theory hypothesis of government regulation prior to the passage of the Motor Carrier Act of 1980.
Restrict international trade in kumquats by imposing a quota that allows imports of only six million pounds of kumquats into the United States each year.
In China, the elasticity of demand is -4. The marginal cost of a Big Mac is $2. Resales are not possible. What price is charged in each country?
If the industry is a monopoly, what will the equilibrium be? How do producer and consumer surplus change from the perfectly competitive case? Make sure the firm is maximizing profits.
Carefully explain how these two deficits are related economically so that changes in one are reflected in changes in the other.
The expected return of the market is 13 percent, and Treasury bills are yielding 6 percent. The most recent stock price for Goetzmann is $53. Calculate the cost of equity using the DCF method.
If the firms collude, what will be the monopoly price (optimal price P*), total output of the two firms (Q= q1 + q2), and the total profits of the two firms?