Spreadsheet problem 1 1 a p 30 d for a profit 303250

Info icon This preview shows pages 3–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Spreadsheet problem 1 1. ( a ) P = $30 ( d ) For ( a ), profit = $30(3,250) – 0.005(3,250)2 + 3,250 = $47,937.5 Froeb and McCann’s chapter 9: a. Individual problems: 9-2 Entry and Elasticity Use the formula (p-mc)/p=1/|elasticity| to determine marginal cost. If the old price is $10 with an elasticity of -2, that means that marginal costs are $5. (10 - mc)/10 = 1/2 10 - mc = 5 10 = 5 + mc 5 = mc Use the same formula with the marginal cost and the new elasticity to determine the price. The new price will be $7.50. (p - 5)/p = 1/3 p - 5 = 1/3p p = 1/3p + 5 2/3p = 5 p = 5(3/2) p = 7.5 9-4 Economic Profits In the short run, a monopolist should have higher economic profits. In the long run, both should be expected to have zero economic profit. The monopolist will take longer to reach the long run.
Image of page 3

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

View Full Document Right Arrow Icon
Froeb and McCann’s chapter 11: a. Individual problems: 11-3 The Carry Trade A decline in US rates would increase the so called carry trade where EU consumers borrow in dollars to finance consumption or investment in the EU. They borrow dollars from US banks, sell dollars to buy euros, and spend the euros in the EU. This increases demand for euros, and raises the price of a euro. The dollar depreciates against the euro. 11-4 Dollar Devaluation A dollar devaluation will increase the demand for US goods and services from Mexican consumers, raising the US price and quantity. This will benefit US producers, but hurt US consumers. A dollar devaluation will also reduce demand for Mexican goods and services, reducing the Mexican price and reducing quantity. This will hurt Mexican producers in Juarez, but benefit Mexican consumers.
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern