The demand and supply functions for corn are as follows. The quantity is in thousands of bushels and the price is in dollars per bushel.

QD = 1000 – 100 P

QS = - 245 + 90 P

A. What are the equilibrium price and equilibrium quantity in this market? Round your answers to 2 decimal places.

B. Graph this market and label all relevant points (equilibrium points, intercepts, axis labels, etc.).

C. Calculate the consumer surplus at the equilibrium price. Shade in the area associated with the consumer surplus in the graph in part B.

D. Assume that the government sets a price floor at $ 7.50 per bushel. Will this create a surplus of shortage in the market for corn? Calculate the surplus or shortage. Calculate the consumer surplus after the price floor.

E. Assume that the price of soybeans (a substitute in production for corn) increases. Use a supply and demand graph to analyze the impact on the price and quantity of corn sold in the corn market. Briefly describe your results.

1. Macaroni Unlimited, Ltd. (MUL), is trying to decide whether or not to enter the spaghetti sauce market. It knows that its actions will be closely monitored by the local spaghetti sauce monopoly, Sicilian Scintillations (SS), which can then choose whether or not to set a high price for sauce or a low price. If Macaroni Unlimited does not enter, it earns profits of zero. If it does, then its profits depend on SS's price. If the price is low, Macaroni Unlimited loses $100. If the price is high, it makes $50. SS's profits with a low price are $10 if MU does not enter and $70 if MU does enter. SS's profits with a high price are $200 if MU does not enter and $50 if MU does enter.

a) Draw this game in the Normal Form (the boxed table like in this Module, payoff matrix).

b) Does either firm have a Dominant Strategy? If so, which?

c) Find all of the Nash Equilibria (in pure strategies).

in java

Write a class named “Stock” to model a stock. The properties and methods of the class are shown in figure below. The method “ percentage ” computes the percentage of the change of the current price vs the previous closing price. Write a program to test the “Stock” class. In the program, create a Stock object with the stock symbol SUND, name Sun Microsystem V, previous closing price of 100. Set a new current price randomly and display the price percentage.

Stock

private String symbol
private String name
private double previousClosingPrice

private double currentPrice
public Stock()
public Stock(String symbol, String name)

public String getSymbol()
public String getName()
public double getPreviousClosingPrice()
public double getCurrentPrice()
public void setSymbol(String symbol)
public void setName(String name)
public void setPreviousClosingPrice(double price)
public void setCurrentPrice(double price)
public double percentage()

A 76 pound flask of mercury cost $134.50. The Density of Mercury is 13.534 g/cm^3.

a) find the price of one cubic inch of mercury by calculating the following intermediate values.

1- What is the price of one pound of Mercury?

2- What is the price of one gram of Mercury?

3- What is the price of one cubic centimeter of Mercury?

4- What is the price of one cubic inch of Mercury

b) It take 4.400 cubic inches of mercury to make one manometer. Find the price of the mercury used to make 13 manometers by first calculating the cost of mercury for one manometer.

1- What is the price of mercury used to make one manometer?

2- What is the price of mercury used to make 13 manometers?

Let the following be the supply and demand for coconuts.

P            2            3            4            5            6            7            8            9            10            11            12

Q_s         100       200      300        400       500       600    700       800      900     1000    1100

Q_D        550       500      450        400       350       300    250       200      150     100    50

Now imagine that there is a price ceiling on coconuts at $3 but in order to prevent wasting peoples' time by making them wait in line, the government hands out ration coupons to people. In order to buy a coconut you need a coupon. Assume that the number of coupons is the appropriate number to clear the market with the price ceiling (you should know what that is). Now notice that the government probably doesn't know who has the highest marginal value for coconuts so, while this will eliminate the waste from the line it will most likely not allocate the coconuts efficiently. However, we can solve this problem by allowing people to trade the coupons! So imagine that there is such a market and it is perfectly competitive.

a. What will the price of a coupon be in this market?

b. Draw the price ceiling graph and identify the consumer and producer surplus, and the dead weight loss. There should be an area in there which would have been the cost of the line had there been a line. Label this area "A." Who gets this surplus now?

Stefanovich company manufactures three products—A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow:

The same raw material is used in all three products. The company has only 6,600 pounds of raw material on hand and will not be able to obtain any more of it for several weeks due to a strike in its supplier’s plant. Management is trying to decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs $8 per pound.

A foreign supplier could furnish the company with additional stocks of the raw material at a substantial premium over the usual price. Assuming the company’s estimated customer demand is 500 units per product line and that the company has used its 6,600 pounds of raw material in an optimal fashion, what is the highest price the company should be willing to pay for an additional pound of materials?

Multiple Choice

• $18

• $23

• $18

• $10

Lift Dentistry Services operates in a large metropolitan area. Lift
has its own dental laboratory used to produce porcelain and gold
crowns. The per unit variable costs to produce these crowns are:

   porcelain  .......  $81 per crown
   gold  ............  $115 per crown

Fixed overhead includes the following:

                                   porcelain         gold
   supervisor's salary             $15,000         $20,000
   allocated general overhead      $ 6,000         $ 6,000

A local dental laboratory has offered to supply Lift all the crowns
it needs. Its price is $100 per porcelain crown and $136 per gold
crown; however, the offer is conditional on supplying both types of
crowns (i.e., the local laboratory will not supply just one type of
crown for the price indicated). If the offer is accepted, Lift could
rent the space now being used to make the crowns to another company
for $16,000 per year. Lift uses 1,800 porcelain crowns and 1,200 gold
crown per year.

Assume the local laboratory will charge $100 per porcelain crown, but
is willing to negotiate on the price of the gold crowns. Calculate the
selling price per unit charged by the local laboratory for the gold
crowns that would make Lift Dentistry Services economically indifferent
between making the crowns themselves and purchasing the crowns from the
local laboratory.

Alpha Corp is a mature firm in the manufacturing sector and currently has a market capitalization of $ 500 million with 100 million shares outstanding. The firm has an annual cash flow earnings of $60 million and its cost of capital is 12%. Alpha Corp is considering taking over Beta Corp which has done reasonably well in the recent past. Beta Corp currently has 10 million shares outstanding with a market capitalization of $ 20 million and annual cash flow earnings of $2 million. The cost of capital for Beta Corp is 10%. The takeover is expected to result in annual additional cash flow of $ 0.75 million in the first year, which are expected to remain constant in perpetuity. The cost of capital for synergies is 12%. Alpha Corp is considering two different options to finance the take over (i) a cash offer with a 20% premium relative to its market price (ii) a share swap of 1 share of Alpha Corp for every 2 shares of Beta Corp .

1. Calculate (i) overall gain (ii) gain to Alpha shareholders and (iii) gain to Beta shareholders if the cash offer is made (2.5 marks).
2. Calculate (i) gain to Alpha shareholders and (ii) gain to Beta shareholders if the share-swap offer is made (2.5 marks).
3. At what cash offer price (cash offer) would this be a zero NPV investment for Alpha Corp? (1 mark)

Vandelay Industries is evaluating a project that costs $1,350,000 and has a 20 year life.

Depreciation will be straight-line to zero over the life of the project. Management believes they

will be able to sell the equipment at the end of the project for $50,000. Sales are projected to be

50,000 units in the first year, 70,000 units in the second year, and 25,000 units for all additional

years. Price per unit is $34.50, variable cost per unit is $15.50 and fixed costs are $300,000 per

year. The project also requires an initial investment in net working capital of $150,000 and for

the project to maintain a net working capital balance equal to $150,000 plus 15% of sales while

the project is ongoing. All net working capital will be recouped at the end of the project. This

project will have an additional spillover effect that will impact existing sales negatively. The net

pre-tax impact of the spillover effect will be -$75,000 per year. This project will also have a

positive spillover effect. Specifically, the project will generate additional sales of 100 units of an

existing product at a price of $15 each. The existing product has variable costs of $9 and fixed

costs of $5,000 per year. The company’s marginal tax rate is 35%. The required return on

similar projects is 11%.

a. What is the project’s NPV?

b. What is the project’s payback period?

c. What is the project’s profitability index?

d. Why might this company decide to pursue this project?