Answer:
a) $3077
b) The owner should make this investment because the marginal benefit is greater than the marginal cost
Explanation:
Given data :
Total cost = $2000
depreciation rate = 8% per year
expected increase in revenue (CF ) = $400
interest rate = 5%
a) Determine the present value of the stream of revenue due to the upgrades
= CF / ( 1 + r ) ^t where ( 1 + r )^t = 13%
= 400 / 13%
= $3077
b) The owner should make this investment because the marginal benefit is greater than the marginal cost
Answer:
First National EAR 14.48%
First United EAR 14.38%
Explanation:
Calculation to determine Calculate the EAR for First National Bank and First United Bank.
Using this formula
EAR = [1 + (APR / m)]m − 1
Let plug in the formula
First National EAR = [1 + (.136 / 12)]12 − 1
First National EAR= .1448*100
First National EAR=14.48%
First United EAR = [1 + (.139 / 2)]2 − 1
First United EAR = .1438*100
First United EAR = 14.38%
Therefore the EAR for First National Bank and First United Bank will be :
First National EAR 14.48%
First United EAR 14.38%
Answer:
<u>Monopoly</u>
P = $20.00
Q = 10,000
<u>Socically Efficient:</u>
P = $16.80
Q = 14,000
The monopoly generates a deadthweight loss to maximize their gain.
In the socially efficient situation, there is no deadthweight loss threfore this makes the economy as a whole better.
Explanation:
Price = 28 - 0.0008Q
Marginal Cost = 0.0012Q
Revenue: P x Q = (28 - 0.0008Q) x Q = 28Q - 0.0008Q²
Marginal Revenue:
R' = R(q) / dq = 28 -0.0016Q
We want to produce and sale until marginal revenue matches marginal cost:
28 -0.0016Q = 0.0012Q
28 = 0.0028Q
Q = 28 / 0.0028 = 10,000
P = 28 - 0.0008 (10,000) =
P = 28 - 8 = 20.00
The social efficiency will be that Price equals Marginal Cost.
28 - 0.008Q = 0.0012Q
28 = 0.0020Q
28 / 0.0020 = Q = 14,000
P = 28 - 0.0008(14,000) = 28 - 11.2 = 16,8
Screen shot or take picture and make it an attachment to the duration
An oligopoly firm is similar to a monopolistically competitive firm in that BOTH FIRMS HAVE MARKET POWER.
Market power refers to the ability of a company to increase and maintain price above the level that would prevail under competition. When market power is exercised, it usually leads to reduced output and loss of economic welfare.
