Profit maximizing single price monopoly. Demand for the product is given by: Q_D=50-2P; total cost: TC=10+6q+0.5q²

a. Determine price he would charge as single price monopolist

b. calculate markup

c. determine quantity he would produce

d. calculate profit earned

1) Run a regression model to estimate the cost of a building using average story height (mean centered) and total floor area (mean centered) as predictors. Using the adjusted R Square statistic, how much variation in the dependent variable can be explained by the model? Select one:

a. between 95% and 98%

b. above 98 percent

c. between 90% and 95%

d. less than 90%

2) Run a regression model to estimate the cost of a building using average story height (mean centered) and total floor area (mean centered) as predictors. Is story height a significant predictor at .05 level? Select one:

a. Yes

b. No

3) Run a regression model to estimate the cost of a building using average story height (mean centered) and total floor area (mean centered) as predictors. Is total area a significant predictor at .05 level? Select one:

a. Yes

b. No

4) Run a regression model to estimate the cost of a building using average story height (mean centered) and total floor area (mean centered) as predictors. Which of the following is wrong about the slope of total area? Select one:

a. It gives the expected change in the predicted cost for each 1 m2 change in total area, holding story height constant.

b. It is a significant slope

c. The expected cost of a building with a total area of 1 m2 is HK$13,965

5) Run a regression model to estimate the cost of a building using average story height (mean centered) and total floor area (mean centered) as predictors. Which of the following is wrong about the slope of story height? Select one:

a. It gives the expected change in the predicted cost for each 1 cm change in story height, holding total area constant.

b. It is a significant slope

c. The expected cost of a building with a story height of 0 cms is HK$3,185,038

6) Run a regression model to estimate the cost of a building using average story height (mean centered), total floor area (mean centered), and construction type (dummy coded) as predictors. Using the adjusted R Square statistic, how much variation in the dependent variable can be explained by the model? Select one:

a. between 95% and 98%

b. above 98 percent

c. between 90% and 95%

d. less than 90%

7) Run a regression model to estimate the cost of a building using average story height (mean centered), total floor area (mean centered), and construction type (dummy coded) as predictors. Which of the following is correct about the intercept? Select one:

a. It is the expected cost of a steel building with an average story height and an average total area.

b. It is the expected cost of a reinforced concrete building with an average story height and an average total area.

c. It is the expected cost of a steel building with a story height of 0 cm and an average total area.

d. It is the expected cost of a reinforced concrete building with an average story height and a total area of 0 m2.

8) Run a regression model to estimate the cost of a building using average story height (mean centered), total floor area (mean centered), and construction type (dummy coded) as predictors. According to the model, is it significantly more expensive (at .05 level) to build a steel building compared to a reinforced concrete building, holding everything else constant? Select one:

a. no

b. yes

9) Run a regression model to estimate the cost of a building using average story height (mean centered), total floor area (mean centered), and construction type (dummy coded) as predictors. Which of the following is wrong about the slope of story height? Select one:

a. it is the expected change in the predicted building cost for a one unit change in story height, holding total area and construction type constant.

b. Has a positive relationship with the cost of building

c. Has a negative relationship with the cost of building

10) Run a regression model to estimate the cost of a building using average story height (mean centered), total floor area (mean centered), and construction type (dummy coded) as predictors. Which of the following is wrong about the slope of total area? Select one:

a. it is the expected change in the predicted building cost for a one unit change in total area, in holding story height and construction type constant.

b. Has a positive relationship with the cost of building

c. Has a negative relationship with the cost of building Building type Average floor area (m2) Total floor area (m2) avg story height(cms) COST (HK$) 1

Building type Average floor area (m2) Total floor area (m2) avg story height(cms) COST (HK$)

1 1852 81478 410 1467000000

1 1608 64313 411 1150000000

1 1430 55783 403 1028000000

1 1562 57794 390 1100000000

1 1109 37695 391 728000000

1 905 28048 382 558000000

1 1852 81478 410 1467000000

1 901 30617 391 631000000

1 1727 69062 400 1223000000

1 1161 37148 394 761000000

1 1004 37141 400 713000000

1 1216 38912 390 784000000

1 2007 88302 422 1593000000

1 2983 173000 440 2649000000

2 1523 70080 372 1210000000

2 912 28286 370 607000000

2 1343 53715 382 977000000

2 1175 32908 381 700000000

2 1203 40902 393 811000000

2 1393 52951 392 1001000000

2 713 20681 375 468000000

2 1047 37681 411 747000000

2 1506 63270 421 1156000000

2 1642 70624 423 1268000000

2 1848 73936 403 1333000000

2 1627 60190 402 1162000000

2 1301 40321 384 864000000

2 905 25330 405 561000000

2 1727 72514 400 1303000000

2 1414 52318 392 1013000000

2 2001 76022 431 1487000000

2 400 9200 380 263000000

2 3100 102190 454 2112000000

2 1677 83860 410 1519000000

2 2415 130032 420 2045000000

2 1555 46637 410 1025000000

2 792 20596 420 540000000

Question 7

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Run a regression model to estimate the cost of a building using average story height (mean centered), total floor area (mean centered), and construction type (dummy coded) as predictors.

Which of the following is correct about the intercept?

Select one:

a. It is the expected cost of a steel building with an average story height and an average total area.

b. It is the expected cost of a reinforced concrete building with an average story height and an average total area.

c. It is the expected cost of a steel building with a story height of 0 cm and an average total area.

d. It is the expected cost of a reinforced concrete building with an average story height and a total area of 0 m2.

Question 8

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Run a regression model to estimate the cost of a building using average story height (mean centered), total floor area (mean centered), and construction type (dummy coded) as predictors.

According to the model, is it significantly more expensive (at .05 level) to build a steel building compared to a reinforced concrete building, holding everything else constant?

Select one:

a. no

b. yes

Question 9

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Question text

Run a regression model to estimate the cost of a building using average story height (mean centered), total floor area (mean centered), and construction type (dummy coded) as predictors.

Which of the following is wrong about the slope of story height?

Select one:

a. it is the expected change in the predicted building cost for a one unit change in story height, holding total area and construction type constant.

b. Has a positive relationship with the cost of building

c. Has a negative relationship with the cost of building

Question 10

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Question text

Run a regression model to estimate the cost of a building using average story height (mean centered), total floor area (mean centered), and construction type (dummy coded) as predictors.

Which of the following is wrong about the slope of total area?

Select one:

a. it is the expected change in the predicted building cost for a one unit change in total area, in holding story height and construction type constant.

b. Has a positive relationship with the cost of building

c. Has a negative relationship with the cost of building

A firm with market power faces the demand function q=4000-40P and a total cost function TC(q)=10q+0.001q²+1000.

a. If the firm acts as a simple monopoly, calculate the firm’s optimal price, quantity and the profits at that point.

b. What is the efficient level of output in this market (i.e., the one that maximizes total surplus, not just producer surplus)?

c. Calculate the deadweight loss from part a).

*I am seeking an answer to Question 1 B.*

ABC company is considering producing a new range of smartphones that will require it to build a

new factory. Feasibility studies have been done on the factory which cost $5 million. The studies

have found the following:

1. The factory will cost $25 million and will have a useful life of 20 years.

2. The land where the factory will go is currently used as a carpark for workers and it is assumed that the company will have to pay $200000 per year for their workers to park in a nearby carpark.

3. The factory will be depreciated on a straight line basis and will have a salvage value of $0 but it is believed that most of it can be sold for scrap after 20 years for $50000.

4. Due to the nature of the business they are in, they will have to perform some environmental tests to make sure that some of the chemicals they are using are not entering the ground water around the factory. These tests will be performed every 5 years and cost $625000.

5. Through the building of this factory and the selling of the phones it produces, it’s revenue will increase by $5 million in year 1 and remain at this level for the operational life of the factory.

6. The extra costs that the company accrues per year due to the project are $435000 for labour, $50000 for overhead like power and water bills and marketing costs for the new line of phones will be $500000 per year but will decrease by $15000 per year as the phone gains greater penetration.

7. The company’s current cost of capital is 8% per year.

8. The tax rate is 30%.

9. The project requires an initial investment in working capital of $1000000 that is returned

   in year 20.

Use the above information to answer the following (IN EXCEL):

A. Calculate the free cash flows that come from this project for the 20 years it is operational. ​

B. Calculate the NPV, IRR and payback period of the project. Should they go ahead with the project?

Two enterprising youths, Mr Paul Bee and Mr Loyd Bee, have just completed the Zambia Institute of Marketing’s Postgraduate Diploma in Marketing. They opted not to look for formal employment but instead start their own business of producing and selling fresh vegetables on the Zambian market. Having learned of the future of conventional foods, they have decided to venture into the cultivation of mushroom.

Mushrooms are known to be the best alternative food for vegetarians. For paul and loyd Bee,fundraising was a serious handicap for mass production of mushroom. However, their first trial batch of mushroom was bought by Intercontinental Hotel in Lusaka. Further, the hotel placed orders for the supply of 20 kilograms of mushroom per day.

The mushroom industry in Zambia is currently run by man small entrepreneurs like Paul Bee and Loyd Bee. However, a major big player, Yong Ling Limited has just entered the market, and is equipped with modern cold storage facilities, although the company is more interested in the export market.

Paul and loyd have set their sight high. They aim to sell mushrooms in a very big way all over Zambia. Mushrooms have a great market potential in Zambia, and is a perishable food.

QUESTIONS

You are required to prepare a report to the Principal that addresses the following issues.

(a)        Identify the main strengths, weaknesses, opportunities and threats facing the business run by Paul Bee and Loyd Bee            

(b)        Advise Paul Bee and Loyd Bee on how they can increase consumer awareness of their product.

(c)        Suggest channels of distribution that Paul Bee and Loyd Bee can use to distribute their mushroom in Zambia.

1. A group of 30 or 40 co-workers on an open manufacturing shop-floor like to play music over the loudspeakers during their work-day. They can't use individual earplugs because the work requires them to be able to communicate across the room constantly, so they all have to listen to the same music. The problem is that they all have different musical preferences and all want to hear their kind of music during the day.

What is the fair and just way to resolve this problem and who should decide? Should they put it to a vote, have the supervisor make the decision, draw lots, allow the smartest people or best workers to decide, allow equal time for each person, equal time for each style of music, more time for music liked by more people, etc...... What should they do?

2. In a public park, a small religious group wants to place a statue commemorating their religious ideals. The City Council considers this and feels that there would be no harm in doing so, but as soon as all the other numerous religious groups in the area hear about it, they also want to place statues in the park as well.

What is the just way to resolve this issue and who should decide? Should the City Council allow everyone to place statues there even if that many would clutter the area?, should they ban all statues?, should they only allow statues of well-established religions or religions with very large followings in the community?, should they hold a vote in the community to decide?, should they take the issue to court and allow a judge to decide?, etc.....What should they do?