Question
In: Economics
Suppose a monopolist has to purchase new equipment and his fixed costs increase. As a consequence,...
Suppose a monopolist has to purchase new equipment and his fixed costs increase. As a consequence, the monopolist’s marginal cost will (Click to select) not change , decrease , increase , and the monopolist’s total cost will (Click to select) decrease , not change , increase ; therefore, the monopolist’s profit-maximizing output quantity will (Click to select) decrease , increase , not change and the monopolist’s profits will (Click to select) decrease , not change , increase.
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
FITCO is considering the purchase of new equipment. The equipment costs $337000, and an additional $114000...
FITCO is considering the purchase of new equipment. The equipment
costs $337000, and an additional $114000 is needed to install it.
The equipment will be depreciated straight-line to zero over a
5-year life. The equipment will generate additional annual revenues
of $260000, and it will have annual cash operating expenses of
$85000. The equipment will be sold for $85000 after 5 years. An
inventory investment of $71000 is required during the life of the
investment. FITCO is in the 40...
FITCO is considering the purchase of new equipment. The equipment costs $354000, and an additional $104000...
FITCO is considering the purchase of new equipment. The
equipment costs $354000, and an additional $104000 is needed to
install it. The equipment will be depreciated straight-line to zero
over a 5-year life. The equipment will generate additional annual
revenues of $266000, and it will have annual cash operating
expenses of $82000. The equipment will be sold for $84000 after 5
years. An inventory investment of $71000 is required during the
life of the investment. FITCO is in the 40...
BITFIT is considering the purchase of new equipment. The equipment costs $360,000, and an additional $120,000...
BITFIT is considering the purchase of
new equipment. The equipment costs $360,000, and an additional
$120,000 is needed to install it. The equipment will be depreciated
straight-line to zero over a 6-year life. The equipment will
generate additional annual revenues of $265,000, and it will have
annual cash operating expenses of $80,000. The equipment will be
sold for $75,000 after 6 years. An inventory investment of $73,000
is required during the life of the investment and will be recovered
by...
FITCO is considering the purchase of new equipment. The equipment costs $355000, and an additional $112000...
FITCO is considering the purchase of new equipment. The
equipment costs $355000, and an additional $112000 is needed to
install it. The equipment will be depreciated straight-line to zero
over a 5-year life. The equipment will generate additional annual
revenues of $268000, and it will have annual cash operating
expenses of $82000. The equipment will be sold for $85000 after 5
years. An inventory investment of $75000 is required during the
life of the investment. FITCO is in the 40...
A business owner must purchase a new piece of equipment for his manufacturing process. He has...
A business owner must purchase a new piece of equipment for his
manufacturing process. He has narrowed it down between two options
that both have a useful life of 9 years. Option A has an initial
cost of $18,000, will provide the company with $3000 a year in
profit, and has a salvage value of $1000. Option B has no salvage
value and is more expensive with an initial cost $26,000 but it
will provide the company with $4200 a...
1.A monopolist has a constant MC = 40 per unit produced, has no fixed costs and...
1.A monopolist has a constant MC = 40 per unit produced, has no
fixed costs and faces a demand curve of q = 200 – 2P. If the
monopolist sells at a single price, which statement is true about
the monopolist’s profit-maximising quantity and price? Group of
answer choices
q = 120, P = 40 q = 40, P = 80 q = 60, P = 70 q = 40, P = 60
None of the other answers is correct...
2. LEAF Company is considering the purchase of new computer equipment that will increase efficiencies within...
2. LEAF Company is considering the purchase of new computer
equipment that will increase efficiencies within its hospital
floors. The following estimates are available: Initial Outlay
$1,000,000 Annual reduction in fixed costs $175,000 Cost of capital
10% Estimated life of computer equipment 5 years Estimated residual
value of equipment $25,000 Determine the net present value
of the computer equipment purchase
Equipment: The project involves the purchase of a new machine. The machine costs $500,000 is depreciable...
Equipment:
The project involves the purchase of a new machine. The
machine costs $500,000 is depreciable over 5 years. The machine
requires a new building which would cost another $250,000 (we
assume that the construction of the building takes place at t=0).
The building is also depreciable over 5 years. The building will
occupy a field bought 2 years ago for $200,000. The best other use
for the field is as a parking lot for employees. The post-tax
present value...
ABC, Inc is planning the purchase of new equipment that costs $149,331. The project is expected...
ABC, Inc is planning the purchase of new equipment that costs
$149,331. The project is expected to last for 14 years. Each year,
the new project is expected to sell 103 units for $480 per unit.
The variable costs are expected to $50 per unit and the fixed costs
are expected to be $23,038. The equipment will be depreciated on a
straight-line basis over the 14-year life of the project. That is,
the depreciation each year will be $149,331/14. Assuming...
ABC, Inc is planning the purchase of new equipment that costs $149,331. The project is expected...
ABC, Inc is planning the purchase of new equipment that costs
$149,331. The project is expected to last for 14 years. Each year,
the new project is expected to sell 103 units for $480 per unit.
The variable costs are expected to $50 per unit and the fixed costs
are expected to be $23,038. The equipment will be depreciated on a
straight-line basis over the 14-year life of the project. That is,
the depreciation each year will be $149,331/14. Assuming...
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