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1. Supposed that you represent the shareholder board of General Motor (GM) and decide to elicit high CEO effort to help the company: a. What will be

Please help with this problem. I need to discuss with group.

1a. The incentive contract plan that the CEO of General Motors could take would be to use business practices or tactics to earn the greatest profit under the prevailing market conditions. One of these practices could be strategic decisions. This is business actions taken to alter market conditions that increase and protect the strategic firm's profit. Long-run profitability could come from having few substitutes or abundant complementary products.

1b. If these strategic decisions do not perform you could use opportunity cost to criticize the incentive contract plan. If the company gives up a resource to produce a certain good or service.

2a. Suppose general supply function is: Qs= 100 +20P-10P1 +20F. $100 for price of an important input for cost for P1 and 30 banks (firms) in the industry selling bonds.

Qs=100+20P-10($100)+20(30)

Qs= -300+20p

Supply Schedule for supply function: Qs=-300+20p

Price Quantity Supplied

140 2,500

120 2,100

100 1,700

80 1,300

60 900

40 500

20 100

The shift would be a supply curve

2b. unsure.
1. Supposed that you represent the shareholder board of General Motor (GM) and decide to elicit high CEO effort to help the company: a. What will be your incentive contract plan (e.g. bonus, stock option…etc.)? b. Given your answer in a, if GM does not perform, what criticism of the incentive contract plan can you see? 2. The U.S. real estate market has been recovering. Please apply demand and supply analysis to answer the following questions: a. What will be the impact on residential real estate market after the Fed stops QE3 (buying bonds monthly from banks)? Please state the possible shift on either demand curve or supply curve. b. If a price ceiling on real estate agency commission is set at 1% only, what will be the impact on new market equilibrium price and quantity of residential real estate market? Please comment on it. Please answer all of the two questions by one paragraph for each sub-question.
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