The following equations represent a firm in a monopolistically competitive market.

Demand: Qd= 32 - P

Marginal revenue: MR = 32 -2Q

Total Cost: TC = 100 + Q^2

Marginal Cost: MC=2Q

1. Will this firm in a monopolistically competitive market continue to earn these profits in the long run? Briefly explain why or why not.

2. Sketch (no need for the sketch to be to scale) a graph that includes that includes the following curves in the appropriate relation to each other: - the firms demand curve - the firms marginal revenue curve - the firms marginal cost curve - the firms average total cost curve (Label the profit maximizing price, quantity produced, and area of profits if non-zero.)

1.) Ajax corporation has a project with a 10 year life and a $200,000 cost. The project is depreciated straight life over the life of the project. Other fixed costs amount to $400,000 and variable costs per unit are $30. If the company intends on selling 50,000 units and has a 10% return requirement, calculate the company’s financial break-even price

2.) Scorpio Inc. is a seafood company specializing in crayfish. Each pound of crayfish cost $25 to produce and can be sold for $100. The company has fixed overhead costs of $300,000 per year, and can claim depreciation of $50,000 per year. What is the cash break-even quantity of sales for Scorpio Inc.

A U.S. Company expects to receive 100 million Russian Ruble 3 months from now. A call and put on Russian Ruble are available with a strike price of RR60/$ for each option, and a premium of 1.5% for the call option and a premium of 2% for the put option. The weighted average cost of capital (WACC) for the U.S. Company is 10% and the current spot rate is RR59/$.

a) If the company hedges in the option market, which option will it choose and what is the cost of option hedge today and at maturity in U.S. Dollars? Explain your answer very well (5 points).

b) If the spot rate at maturity is RR65/$, how much would the company receive (net) in 3 months from the option hedge? (5 points)

Presented below is information related to Kingbird Company.

Compute the ending inventory for Kingbird Company for 2017 through 2022 using the dollar-value LIFO method.

Micro Bike Company has short term investments of $50, debt of $1,500, and preferred stock of $200. The equity of the Micro Bike has 100 shares. The company forecasts the following:

a. What is the Present Value of Free Cash Flows?

b.What is the Present Value of the Horizon Value?

c. What is the estimated intrinsic value of the equity?

d. What is the estimated intrinic stock price?

plase show work ( the last colums is year 2019)

4. If a drop in government spending of $ 2 billion produces a drop in the economy's real GDP of $ 10 billion, what is the value of that country's PMC?

5. When the price level is fixed and the investment increases by $ 100, the equilibrium expense increases by $ 500.

a. Both the marginal propensity to consume and the multiplier is 0.2
b. The multiplier is 0.2.
c. The multiplier is 5.0.
d. The slope of the GA curve is 0.2.

6. All of the following statements about equilibrium spending are true except:
a. The unplanned investment in inventories is zero.
b. The planned aggregate expense equals the actual expense.
c. Planned aggregate spending equals real GDP.
d. The effective investment is less than the planned investment.

Suppose the fixed costs at a widget factory are $500.00 and variable costs per widget are as indicated. Compute the total average costs for each of the following: 1. Producing 10 widgets when the variable cost is $10 per widget Total Cost = $ _________ Average Cost = $ _________ 2. Producing 20 widgets when the variable cost is $15 per widget Total Cost = $ _________ Average Cost = $ _________ 3. Producing 100 widgets when the variable cost is $20 per widget Total Cost = $ _________ Average Cost = $ _________ b. Suppose that widgets sell for a price of $50. Compute total revenue (TR) and profit (P) for each of the above cases. 1. TR = $ _______ P = $ _______ 2. TR = $ _______ P = $ _______ 3. TR = $ _______ P = $ _______

S

Smith-Kline Company maintains inventory records at selling prices as well as at cost. For 2021, the records indicate the following data:

Required:
Assuming the price level increased from 1.00 at January 1 to 1.80 at December 31, 2021, use the dollar-value LIFO retail method to approximate cost of ending inventory and cost of goods sold. (Do not round intermediate calculations. Round final answers to the nearest whole dollar. Enter your answers in thousands.)

The following operating information reports the results of Riverbed Company’s production and sale of 12,500 air-conditioned motorcycle helmets last year. Based on early market forecasts, Riverbed expects the same results this year.

The American Motorcycle Club has offered to purchase 2,000 helmets at a price of $100 each. Riverbed has sufficient idle capacity to fill the order, which would not affect the company’s cost structure or regular sales.

If Riverbed accepts this order, by how much will its income increase or decrease?

Public Goods

Two people living in the same small neighborhood make up the total demand for streetlights:

P1= 200-2Q

P2= 100-Q

assume streetlights in the area a pure public good.

A. Define Pure Public good. Briefly explain why the private sector might fail to produce enough pure public goods.

B. Assume the streetlights can be provided at $240 per unit. Why would it be inefficient to just charge each person $120 per lighthouse (split the cost between them)?

C. What is the efficient number of lighthouses to build, and what should each person pay per lighthouse (Lindahl price)? Draw and solve.