Chapter 3 Homework Elasticity 8E
1.
Answer the following questions based on the accompanying diagram.
a. How much would the firms revenue change if it lowered the price from $12
to $10? Is demand elastic or inelastic in this range?
When P = $12, R = ($12)
Chapter 5 Homework Solutions
(8th Edition)
4.
An economist estimated that the cost function of a single-product firm is
C(Q) = 100 + 20Q + 15Q2 + 10Q3
Based on this information, determine:
a. The fixed cost of producing 10 units of output.
FC = $100.
b. T
Understanding Marginal Costs
An understanding of the concept of marginal costs is imperative for managerial decisionmaking. Managers use marginal cost analysis to make optimal output and pricing decisions. The
fundamental reason that marginal costs are so
Elasticity and Revenue Maximization with Exponential Functions
David J. Bryce
There are some mathematical results that you may find interesting or want to be aware of
with respect to exponential demand functions. Exponential functions have some very nice
Chapter 2 Supply Homework (8th Ed.)
6. Suppose demand and supply are given by Qd = 60 P and Qs = P 20.
a. What are the equilibrium quantity and price in this market?
Equating quantity supplied and quantity demanded yields the equation
60 = 20. Solving for
Elasticity of Demand
Business Management 387
Mark H. Hansen, PhD
Strategy Group
Organizational Leadership & Strategy
1
Own Price Elasticity of Demand
The rate at which quantity demanded
falls as price rises is defined by the
price elasticity of demand
D
Chapter 2: Answers to Questions and Problems
4. The demand for good X is given by
1
1
Q d = 6, 000 P P + 9P + M
x
z 10
2 x y
Research shows that the prices of related goods are given by Py = $6,500 and Pz = $100,
while the average income of individuals co
The Power of Suppliers
Man Ec 387
Winter 2013
Mark H. Hansen, PhD
Strategy Group
Organizational Leadership & Strategy
The Structure of Industries
Threat of new
Entrants
Bargaining
Power of
Suppliers
Competitive
Rivalry
Bargaining
Power of
Customers
Threat
Strategy & Economics
Man Ec 387
Winter 2013
Mark H. Hansen, PhD
Strategy Group
Organizational Leadership & Strategy
1
What is Strategy?
a planned set of activities directed toward a goal
a theory about how to maximize the benefit
from the resources of th
Demand
Man Ec 387
Winter 2013
Mark H. Hansen, PhD
Strategy Group
Organizational Leadership & Strategy
1
Market Demand Curve
Shows the amount of a good that
will be purchased at alternative
prices
Law of Demand
The demand curve is downward
Price
Price
s
Production & Cost
Man Ec 387
Winter 2013
Mark H. Hansen, PhD
Strategy Group
Organizational Leadership & Strategy
1
The Structure of Industries
Threat of new
Entrants
Bargaining
Power of
Suppliers
Competitive
Rivalry
Bargaining
Power of
Customers
Threat of