BA_315_Final_Fall_03_Version_1

BA_315_Final_Fall_03_Version_1 - BA 315 Economy Industry...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1 BA 315: Economy, Industry and Competitive analysis Name:________________ Final Exam: Fall 2003 HW Team#:___________ Department of Finance CRN#:_______________ Lundquist College of Business Ali Emami This exam consists of two parts, A and B. There are four questions in Part A each worth 10 points. There are 20 multiple choices questions in part B each worth three points. Support your answers to questions in part A by showing your calculations, words, and graphs. Correct answers without such supports will not receive any credit. For multiple choices questions, circle only one of the letters associated with the right answer (do not make any other forms of marking on answers). Multiple answers and markings for one question will not receive any credit. Part A: Market Structures, Pricing and Profits (10 Points Each Question) 1. Suppose you inherited $100,000 and decided to invest the money in a boutique (although you could have bought bonds paying a guaranteed 10% annual return). At the end of the first year, your accountant reported that your sales had exceeded your costs by $10,000. A: What is your economic profit for the year? a. a profit of $10,000 b. a profit of $5,000 c. zero d. a loss of $5,000 e. a loss of $10,000 B: What is your normal profit for the year? a. a profit of $10,000 b. a profit of $5,000 c. zero d. a loss of $5,000 e. a loss of $10,000 2. Below are the total cost curve for firm X that belongs to a multi-firm Industry and the demand schedule for industry. Assume that are 15 firms currently in industry (including firm X) and that all firms have identical cost functions. Assume there are no industry-specific factors of production. Industry Demand Firm’s Supply Output Per day Total Cost Average Total cost Average Variable cost Average Fixed Cost Marginal Cost Price (P) Quantity (Q) Price (=MC) quantity (q) Supply Of 15 firms 0 300 ---- ----- ----- ----- 10 400 10 4600 20 520 12 3900 30 660 14 3300 40 820 16 2700 50 1000 18 2280 60 1200 20 1800 70 1420 22 1500 80 1660 24 1200 90 1920 26 900 100 2200 28 720 a. Determine the short-run supply schedule for an individual firm and for the industry (15 firms). b. What are the short-run equilibrium price and out-put for the industry? P =$__________, Q =____________ c. Determine the short-run profit or loss for each firm. ( Profit = ) d. What are the long-run equilibrium price and output for the industry? (P =$__________, Q =_____________) e. How many firms are operating in this industry when the industry is in the long-run equilibrium? N=____________.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2 3. The next question refer to the following table which gives the demand and cost data facing a firm: Price Output Total Cost 20 7 $36 19 8 45 18 9 54 17 10 63 16 11 72 15 12 81 14 13 90 13 14 99 12 15 108 11 16 117 10 17 126 9 18 135 8 19 144 a. Suppose this firm behaves as a monopoly, calculate P, quantity, and profits ? P=_______, Q=_______,
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 6

BA_315_Final_Fall_03_Version_1 - BA 315 Economy Industry...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online