Justify why a perfect market is unrealistic

A monopolist can practice third-degree price discrimination. If demand in the United States is given by y1 = 7,200 – 100p1, wher

Novosadov [1.4K]

Answer:

The difference between the monopolistic price charged in England and the monopolistic price charged in the United States will be = 27

Explanation:

Y1 = 7200 -100p1 = > p1 = 72 – y1/100

Y2 = 3600 – 200p2 = > p2 = 18 – y2/200

The cost of monopolist (since it’s the same firm and uses same technology) shall be same in both countries, hence let us assume marginal cost to be say c

Now the first order condition for Profit Maximisation of a monopolist yields

Marginal Revenue = Marginal cost

= > Marginal Rev US = c = Marginal RevEngland…………………..i

Now, Revenue in US = p1y1 = y1(72 – y1/100)

MR US = dRev/dy1 = 72 – y1/100 -y1/100 = 72 – y1/50

Similarly MREng = 18 – y2/100

Hence putting the above derivations in i:-

72 – y1/50 = 18 – y2/100

Now putting values for y1 and y2 again the above equation becomes:-

72 – (7200 -100p1)/50 = 18 – (3600 – 200p2)/100

= > 54 – 144 + 2p1 = -36 + 2p2

= > 2(p1 – p2) = -36 + 90 = 54

= > p1 – p2 = 27

8 0

3 years ago

Johnson Enterprises uses a computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hou

Ganezh [65]

Answer:

The current machine should be replaced as doing that brings $6000 in benefits as shown below.

Explanation:

In order to determine which of the two options between replacing the old machine and acquiring new machine is more viable it would be appropriate to carry out an incremental cost/benefits analysis of both options:

Old machine New machine Difference

A B A-B

Operating annual costs $125,000* $100,000** $25,000

New machine costs $0 $25,000 -$25,000

salvage value ($,6000) $6000

Total costs $125,000 $119,000 $6,000

*The old machine has $125,000 ($25,000*5) estimated operating costs for five years.

**The new machine has $$100,000($20,000*5) estimated operating costs for five years

The cost of price of the old asset is not relevant as it is a sunk cost.

3 0

3 years ago

The amount of money deposited 25 years ago at 5% interest that would now provide a perpetual payment of $15,000 per year is clos

Mademuasel [1]

The amount of money needed now to begin the perpetual payments is
P = A/I =15,000÷0.05=300,000

The amount that would need to have been deposited 25 years ago is
P=A÷(1+r)^t
P=300,000÷(1+0.05)^(25)
P=88,590.83

6 0

4 years ago

A company pays $35,000 per period to rent a small building that has 12,000 square feet of space. This cost is allocated to the c

Alexus [3.1K]

Answer: $7,000

Explanation:

As the question says, a total of $35,000 is paid for 12,000 square feet of space and that the rent is apportioned on the basis of space.

Department One occupies 2,400 square feet of that space.

Calculating the proportion it occupies is,

= 2,400/12,000

= 20%

Since it occupied 20% of the total space then it should be charged 20% of the rent bill.

= 20% * 35,000

= $7,000

Department One should be charged rent expense for the period of $7,000.

6 0

3 years ago

ken and sue are purchasing a home but are short on the down payment required by their lender. sue's mother offered to give them

aleksandrvk [35]

She is permitted, according to the applicable tax legislation, to donate $30 000.

This is further explained below.

<h3>How much can Sue's mother give under current tax laws?</h3>

In most cases, Sue's mother is able to pay Ken the first fifteen thousand dollars and then proceed to give Sue the remaining fifteen thousand dollars. Because Sue's mother gave this to her, there will be no tax placed on it because it is considered a gift.

The act or process of passing tax laws, as well as the body of laws that allow for the levying of taxes and the administration of taxes, are together referred to as tax legislation.

Any object or document that is verifiable and that is frequently accepted as payment for goods and services as well as the repayment of obligations, such as taxes, in a given nation or socio-economic setting is considered to be money in that nation.

In conclusion, Sue's mother and father could give Ken and Sue a gift of $15,000 each, bringing the total amount of money they give to each of them to a grand total of $60,000 each.

Justify why a perfect market is unrealistic​

Justify why a perfect market is unrealistic