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In business if the revenue you generate exceeds the costs you incur, you
earn a positive profit.
If your costs exceed your revenue, your profit is negative (i.e., you incur a
Profit TR TC
Remember, TR P Q
If a supplier faces a downward-sloping dema
A01932917 Dong Xiao
3. Identify whether each of the following transactions involves spot exchange,
contract, or vertical integration.
a. Barnacle, Inc., has a legal obligation to purchase 2 tons of structural steel per week
to manufacture conveyor frames
Adamson vs. Makers Mark
Long Arm Statue
The Long Arm Statue is the process of bringing one party in from out of state. For Mr.
Adamson to be able to use the Long Arm Statue, he was able to prove 2 things. First is
minimum contact and s
People often think of markets as being characterized by
intense competition. I think they are better understood as
systems of intense cooperation. -unknown
The revenue potential of a supplier is ultimately determined by the
demand that supplier faces.
PERFECT COMPETITION - PRACTICE PROBLEMS
Again, the practice problems here should be helpful in checking your knowledge of the
material. Do not assume that these practice problems are not the wherewithal to learning the
material. You should study the mater
One of the main objectives of consumers is to maximize their
net gains from their voluntary participation in markets. That is,
they attempt to MAXIMIZE.
Consumers attempt to maximize their consumer surplus.
Consumers attempt to maximize the satisfa
The inverse market demand in a homogeneous-product Cournot duopoly is P = 100 2(Q 1 + Q2)
and costs are C 1 (Q1) = 12 Q1 and C2 (Q2) = 20 Q2.
a. Determine the reaction function for each firm.
Profit for the two firms are
1 = Q1 (100 2(Q1 + Q2) 12 Q1
2 = Q
1. The X-Corporation produces a good (called X) that is a normal good. Its
competitor, Y-Corp., makes a substitute good that it markets under the name Y.
Good Y is an inferior good.
(a) How will the demand for good X change if consumer incomes increase?
A01932917 Dong Xiao
1.Use the following one-shot, normal game to answer questions below:
a. Find each players dominant strategy, if it exists.
1. Player 1s
Dong Xiao A01932917
1. (10 points) A firm can manufacture a product according to the production
Q = F(K, L) = K3/4L1/4
(a) Calculate the average product of labor, APL, when the level of capital is fixed at 16
units and the firm uses 16 units of
2. An industry consists of five firms with sales of $200 000, $500 000, and $400 000.
a. Calculate the Herfindahl-Hirschman index (HHI).
S1 =200000, S2 =500000, S3 =400000
So ST = S1 + S2 + S3 =200000+500000+400000=1100000
W1 = S1 / ST =200000/1100000=2/1
1. A consumer has $400 to spend on goods X and Y. The market prices of these two
goods are Px= $10 and Py= $40.
a. What is the market rate of substitution between goods X and Y?
the market rate of substitution bet
The shear shack
Questions/Items to look for at Salons
-Majority of service asked for?
The Shear shake services consist of hair and nails. They do male and female cuts and
Mens haircuts are around $20 and womens can be up to