Lynn is thinking about leaving her job as a CPA to open a clothing store. The estimated revenue for a year is $200,000. Her costs are $120,000 in rent, insurance, utilities, equipment, and inventory. She would also be forgoing her wages of $75,000 in order to run her business full time.

a. What is her accounting profit?

b. What is her opportunity costs?

c. What is her economic profit?

d. Should she leave her job and open this clothing store?

a. The price elasticity of a good is -4.2. What does this mean? What would happen to the total revenue collected if prices were to increase by 10% and explain your answer.

b. The income elasticity of a good is 0.25. What does this mean? What can we conclude about this good and explain how you came to this conclusion?

c. The cross-price elasticity of a good is -1.5. What does this mean? What can we conclude about this good and explain how you came to this conclusion?

a. Give three characteristics of a perfectly competitive market. [3 marks]

b. List and explain three types of barriers to entry that may be used in a monopoly. [3 marks]

c. For a monopolist, why is marginal revenue less than price for every level of output except the first? [4 marks]

d. Give the conditions which should exist for price discrimination? [3 marks]

e. Draw a diagram to show the long run equilibrium condition of the perfectly competitive firm [4 marks]   

1a) What model of market pricing behavior would be best suited to describe the production and pricing decisions being made here for Green Sparty soda (Perfect Competition, Monopoly, Monopolistic Competition)? Explain your answer.

1b) n addition to selling her own new soda, this entrepreneurial Spartan is also selling a generic cola which sells in the market at a price of $1 for a 2-liter bottle. What is the Marginal Revenue (MR) for selling a bottle of this generic cola?

A manager must decide how many machines of a certain type to purchase.

Each machine can process 101 customers per day.

One machine will result in a fixed cost of $2,038 per day, while two machines will result in a fixed cost of $3,836 per day.

Variable cost will be $22 per customer and revenue will be $49 per customer.

Determine the break-even point in units for TWO machines.

*Round your answers to 3 decimal places in your calculation if necessary.

As part of an effort to increase cash and reduce the cash cycle, the connections between the AP and AR processes are often scrutinized to see if the company is fully billing what it is entitled to bill … to this end, folks sometimes ask about "unbilled" and how long that "unbilled" has remained in that state … is number for "unbilled" best derived from what has been declared as revenue under 606 but not yet billed or as what has been billed out to vendors if vendors are involved in the performance?

A monopolist faces a market demand curve given by P(y)=100-y. Its cost function is C(y)=y2+20.

a) Find its profit-maximizing output level and market price.

b) Calculate its total revenue, total cost and profit at that output.

c) Calculate CS, PS and DWL? d) What is the efficient amount of output?

e) Plot the graph for this monopolist indicating P(y), MR, MC, y*, p(y*), CS, PS, and DWL.

  NPV=  

For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Big Winner is charging $300 per room per night.

If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the Big Winner (falls OR rises) from (..........) rooms per night to (.........) rooms per night. Therefore, the income elasticity of demand is ( positive OR negative ) , meaning that hotel rooms at the Big Winner are ( an inferior good OR an normal good)  

If the price of an airline ticket from SFO to LAS were to increase by 10%, from $200 to $220 roundtrip, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Big Winner (falls OR rises)   from (..........) rooms per night to (.........) rooms per night. Because the cross-price elasticity of demand is ( positive OR negative ) , hotel rooms at the Big Winner and airline trips between SFO and LAS are ( substitutes OR complement ).

Big Winner is debating decreasing the price of its rooms to $275 per night. Under the initial demand conditions, you can see that this would cause its total revenue to ( decrease OR increase ) Decreasing the price will always have this effect on revenue when Big Winner is operating on the ( elastic OR inelastic ).