<span>An opportunity cost is the value or benefit that must be given up to acquire or achieve something else. In this case whatever you choose (Coke, Dr.Pepper or 7-UP) everything would be free , at zero cost. This means that the opportunity cost in this case is zero, because the drink is free.</span>
Answer:
a. Marginal Revenue = 5
b. Maximum profit = $144
c. Q optimum = 12 ; P optimum = $17
d. Social cost = $72
Explanation:
Step 1. Given information.
Step 2. Formulas needed to solve the exercise.
- Total Revenue=TR=P*Q=(29-Q)*Q=29Q-Q2
- Marginal Revenue=dTR/dQ=29-2Q
Step 3. Calculation.
Set MR=MC for profit maximization
29-2Q=5
2Q=29-5
Q=12 -----profit maximizing output
P=29-Q=29-12=$17 -------profit maximizing price
Total Profit=(P-AC)*Q=(17-5)*12=$144 ------Maximum Profit
Lerner's Index=(P-MC)/P=(17-5)/17=0.7059
<h2>
</h2><h2>
TAKE A LOOK TO THE ATTACHED IMAGE</h2>
Profit is shown by rectangular shaded area.
Socially optimal price P=MC=$5 --------Socially optimal price
We know P=29-Q, Set P=5
5=29-Q
Q=24 ---------Socially optimal output
Social Cost is equal to dead weight loss. It is shown by triangular area DWL
Social Cost=1/2*(17-5)*(24-12) =$72
D. Because he is listening to her fully and making sure he fully understands what she is asking
Answer:
The correct answer is (C)
Explanation:
In today's competitive environment firms and organisations are producing similar goods and services and offering them to the customers at almost the same prices. This has resulted in low market share due to no barriers to entry. The only aspect which can help companies to grow market share is to improve the quality of goods and services. Quality of goods and services is the only thing now consumers want.
Answer:
lower than 4.53%
Explanation:
To determine whether the project is viable, we will use the Internal Rate of Return (IRR). This is the rate at which the Net Present Value (NPV) becomes Nil. In other words, the point at which the discounted net cash outflows are equal to the discounted net cash inflows
In this question, there is one outflow of cash worth $220 million at the start of the project (t=0) and one inflow of $300 million in 7 years.
To calculate IRR, we will use the following formula:.
220 = [300 / ((1+r)^7)]
Solving for r, we find that the interest rate is 4.53%.
Given the cash flows, the project should be accepted at all rates below 4.53% as it will create value for the company.
