15. A typical firm in a monopolistically competitive industry faces the following demand and total cost equations for its product Q= 20- 1/3 P TC= 100-5Q+ Q2 a. What is the firm’s short-run profit-maximizing price and output level? b. What is the firm’s economic profit? c. Suppose that the existence of economic profit attracts new firms into the industry such that the new demand curve facing the typical firm in this industry is Q=35/3 - P/3. Assuming no change in the firm’s total cost function, find the new profit-maximizing price and output level. d. Is the firm earning an economic profit? e. What, if anything, can you say about the relationship between the firm’s demand and average cost curves? Is this result consistent with your answer to part c?

1. Consider a monopolist whose total cost function is TC = Q³ – 30Q² + 301Q, whose inverse demand function is P = 1501 – 30Q where Q is output and P is the price.
   1. If the firm were to act as a single price monopolist, how much will it produce? What price it will charge? How large will be its profit? Calculate the firm’s Lerner Index of monopoly power.
   2. Now suppose this firm can practice perfect price discrimination. How much does it produce? If the firm produces Q = 25, what is the lowest price it charges for any unit, and what are its profits?

Athletic World began October with merchandise inventory of 95 crates of vitamins that cost a total of $3,800. During the month, Athletic World purchased and sold merchandise on account as follows:

Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological​ order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual​ record, calculate the quantity and total cost of merchandise inventory​ purchased, sold, and on hand at the end of the period.​ (Enter the oldest inventory layers​ first.)

Requirement 1. Prepare a perpetual inventory​ record, using the FIFO inventory costing​ method, and determine the​ company's cost of goods​ sold, ending merchandise​ inventory, and gross profit.

A production function is given by q = L1/3K1/3 and a total cost function is given by TC = q2/3. Under what conditions could these belong to the same firm?

1. A publicly‐held corporation has a total debt of $12 million with an average interest cost of 15%. The company has outstanding 1 million shares of common stock, currently traded at a price of ₺10/share in NYSE. The company is subject to a 20% corporate tax rate.
   1. If the risk‐free rate of interest (current yield on short‐term T‐bills) is 8%, the stock market is expected to return 18% next year and the company’s estimated (CAPM) beta is 1.5, what is the required rate of return on its equity?
   2. Calculate the company’s weighted average cost of capital.

The firm in above is considering a new project, which requires an initial investment in equipment of 90,000 and also an initial investment in working capital of 10,000 (at t = 0). You expect the project to produce sales revenue of 120,000 per year for three years. You estimate manufacturing costs at 60% of revenues. (Assume all revenues and costs occur at year‐end) The equipment fully depreciates using straight‐line depreciation over three years. At the end of the project, the firm can sell the equipment for 10,000 and also recover the investment in net working capital. a. Find the project’s payback period, IRR, NPV and profitability index. b. Should the company invest in the project? Explain. c. Does your decision in (b) depend on the way the project is financed? If so, how?

PS:I wrote the first question because the second question will be solved using the data from the first quesion. Sorry for posting 2 questions.

Assume Oakland.net began November with 16 units of inventory that cost a total of KD 256.

During the month of November Oakland purchased and sold goods as follows:

November 8: Purchase of 48 units @ KD 17 each

November 14: Sale of 40 units @ KD 34 each

November 22: Purchase of 32 units @ KD 19 each

November 27: Sale of 48 units @ $34 each

Under the FIFO inventory costing method and the perpetual inventory​ system, how much is

Oakland​'s cost of goods sold for the sale on November 27?

Select one:

a. KD 912

b. KD 768

c. KD 816

d. KD 864

Consider a firm providing repairing services. Suppose that the total cost of repairing s cars is given by

c(s) = 2s²+ 100

where s is the number of repair services he provides.

(a) Find the marginal cost.

(b) In the short-run, if the price of repair services is $20, then how many services will be provided?

(c) If the price stays at $20, and the fixed cost of $100 also stays in the long-run (due to the fee for the permit, for example), then what would the firm do? Explain your answer.

A production function is given by q = L1/5K1/5 and a total cost function is given by TC = q2/5. Under what conditions could these belong to the same firm?