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Alex Ar [27]
3 years ago
14

Tracy consumes dress shoes​ (D) and casual Crocs​ (C). Her marginal utility from consuming casual Crocs is MU Subscript Upper CM

UCequals=20DC and her marginal utility from consuming dress shoes is MU Subscript Upper DMUDequals=10Upper C squaredC2. Her annual shoe allowance is ​$450450​, which she spends on only dress shoes and Crocs. If she pays ​$5050 for a pair of dress shoes and ​$2525 for a pair of​ Crocs, what is her optimal consumption​ bundle?
Business
1 answer:
Llana [10]3 years ago
7 0

Answer:

The optimal bundle is 6 pairs of dress shoes and 3 pairs of Crocs.

Explanation:

From the question,

Allowance (M) = $450; Price of dress shoes, Pd = $50; Price of crocs, Pc = $50

Note: MRS-price ratio, MUC- marginal utility from consuming casual Crocs ,MUD- marginal utility from consuming dress shoes

Optimal bundle is determined where MRS = Price ratio

MRS = MUC/MUD = 20DC/10C2 = 2D/C

Price ratio = Pd/Pc = 50/50 = 1

So, 2D/C = 1

       Therefore, C = 2D

Budget constraint:  M = Pd*D + Pc*C

So, 50D + 50*(2D) = 450

      50D + 100D = 150D = 450

So, D = 450/150 = 3

C = 2D = 2*3 = 6

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Answer:

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Dr Investment in securities 500,000

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Securities were sold at 98 or $250,000 x 98% = $245,000, which means that the company lost $5,000 with that investment.

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Answer:

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3 years ago
For each of the following scenarios, identify the number of firms present, the type of product, and the appropriate market model
marshall27 [118]

Answer:

Number of Firms - many

Type of Product - differentiated

Market Model - monopolistic competition

Number of Firms - many  

Type of Product - standardised  

Market Model - perfect competition

Number of Firms - few  

Type of Product - standardised  

Market Model - oligopoly

Number of Firms - one

Type of Product - unique

Market Model - monopoly

Explanation:

A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.   In the long run, firms earn zero economic profit.  If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.  

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.  

A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopoly has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.

An example of monopolistic competition are restaurants  

A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.

An example of a monopoly is a utility company

An Oligopoly is when there are few large firms operating in an industry. While, a monopoly is when there is only one firm operating in an industry.

Oligopolies are characterised by:

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2 years ago
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Answer:

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Hope this Helps.

Goodluck.

4 0
3 years ago
Read 2 more answers
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