What are three financial rations that constitute return on revenue, and what do they tell us?
In: Economics
The table given below reports the marginal revenue and marginal
cost of Holmes Detective Agency for each client.
Table 9.2
|
Holmes’s Detective Agency |
||
|
Number of Clients |
Marginal Revenue |
Marginal Cost |
|
4 |
70 |
$40 |
|
5 |
60 |
$45 |
|
6 |
50 |
$50 |
|
7 |
40 |
$60 |
|
8 |
30 |
$70 |
|
9 |
20 |
$90 |
|
10 |
10 |
$120 |
Refer to Table 9.2. If we assume that Holmes is currently serving 8 clients, then Holmes Agency:
A) Is maximizing profit.
B) Should find more clients to increase profits.
C) Is maximizing total revenue.
D) Could increase profits by serving less clients.
E) Is minimizing cost.
In: Economics
1What is the relationship between the form of elasticity (e.g. unitary) and total revenue?
2Define each of the following: a) elastic demand b) unitary demand c) inelastic demand.
In: Economics
In: Economics
6. What if the world’s diamond producers restrict output in an effort to increase total revenue? Are they likely to be successful? Explain
In: Economics
A senator wants to raise tax revenue and make the workers better off. A staff member proposes raising the payroll tax paid by firms and using part of the extra revenue to reduce the payroll tax paid by workers. Would this accomplish the senator’s goal?
In: Economics
1. Imagine that you work for the central bureaucracy and you need to raise revenue. You want to use a per-unit tax on some good. There are two possible goods. The current equilibrium price and quantity are the same for both goods. However, for good A,both the supply and demand are more elastic than for good B. The tax will be $1/unit regardless of which good you choose to tax. Which good will give you more revenue? Which one will be more efficient? Show this with two graphs. (You do NOT need to show the incidence on buyers and sellers to answer this question. These graphs should be pretty simple.....)
2. Country X has 100 units of labor. In country X it takes 10 units of labor to produce an airplane and 5 units of labor to produce a unit (whatever it is....) of coffee beans. Country Y has 200 units of labor. In country Y it takes 10 units of labor to produce an airplane and it takes 2 units of labor to produce a unit of coffee. Who has a comparative advantage in airplanes? Draw the PPF for these two countries combined. Label the slopes and intercepts.
In: Economics
The Company X has a monopoly on the beer market. Market demand is given by ?? = 200 - 4? and the company's short-term cost as a function of ? is given by ? (?) = ?2 + 40
What is the marginal revenue (MR) and marginal cost (MC) as a function of Q? At what quantity is ?? = ???
In: Economics
Suppose that the inverse demand function, marginal revenue, marginal cost and total cost for a gizmo product produced by a monopolist are as follows:
P = 100 - 2Q
MR = 100 - 4Q
MC = 2
TC = 10 + 2Q
a. Find the monopolist's profit-maximizing output and price.
b. calculate the monopolist's profit/losses, if any.
c. What is the Lerner Index for this industry.
In: Economics
1)TRUE OR FALSE
a)For a firm in a competitive market,marginal revenue is always equal to average revenue
b)The assumption of free entry and exit is necessary for firms in a competitive market to be price takers
c)A profit-maximizing firm in a competitive will increase production when average revenue exceeds marginal cost
d)In marketing a short-run profit -maximizing production decision , the firm must consider both fixed and variable cost
e)A profit-maximizing firm in a competitive market will earn zero accounting profits in the long run
f)A firm will shut down in the short run if revenue is not sufficient to cover its variable costs of production
g)the supply curve of a firm in a competitive market is the average variable cost curve,above the minimum of marginal cost
h)A firm in a competitive market will maximize profit when the level of production is such that marginal cost equal price
In: Economics