Unformatted text preview: investments in their human capital because they expect to be compensated for doing so when they begin work. In “Canada”, the government nationalized the health-care system and reduced doctors’ compensation. Is this a form of post-investment hold-up ? 3) Nike Demand (inelastic) At the current price demand for Nike running shoes is inelastic, should Nike raise or lower price? 4) Burrito Barn The Burrito Barn is considering a price reduction on the Firegut Burrito, which currently sells for the price of $5.00. Giuseppe, the proprietor of Burrito Barn, knows the price elasticity for the Firegut is roughly equal to -2.3 over the range being considered for the price change. The Firegut has been selling at the brisk pace of 500 burritos per week. To increase market share, Giuseppe would like to increase sales to 750 per week. What price should Giuseppe set?...
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- Spring '11
- Injection molding, injection molding machine, toy truck, Burrito Barn, toy trucks, new toy truck