Chicken wing chicken wing hot dog and bologna
As long as the marginal benefits are higher than the marginal costs you are better off continuing the activity.
Consider the example of eating pizza. Each slice of pizza gives you happiness and helps fill you up (marginal benefit), but each slice also has lots of calories and fat (marginal cost). As long as you are still hungry and getting enjoyment from eating, you should keep eating. But once you reach the point where you are too full then you should stop, because the costs now outweigh the benefits.
Answer:
The Required Return is 10.82%.
Explanation:
The Dividends Model for the Constant Growth is given below:
P0 = D1 / (Ke - g)
Arranging the above equation for "Ke", that is the Required Return:
⇒ Ke = (D1 / P0) + g
Putting Values and we get:
Required Return = Ke = (2.34 / 37) + .045 = .1082 = 10.82%.
Thanks!
The real interest rate given the nominal and inflation rate is -2 percent
<h3>How to calculate the real interest</h3>
The formula for calculating real interest given the nominal and inflation rate is expressed as:
Real interest rate ≈ nominal interest rate − inflation rate
Given the following
Real interest = 4%
inflation rate = 6%
Substituting into the formula
Real interest rate = 4% - 6%
Real interest rate = -2%
Then the real interest rate given the nominal and inflation rate is -2 percent
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Game theory suggests that competing firms in an oligopolistic industry may be reluctant to change prices because they anticipate that rivals will match price cuts but ignore price increases.
<h3>What is Game theory?</h3>
Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.
Dominant strategy is the best option for a player regardless of what the other player is playing. Nash equilibrium is the best outcome for players where no player has an incentive to change their decisions.
Here are the options:
. too quick to raise prices because they will fail to anticipate that rivals may gain market shares.
b. reluctant to change prices because they anticipate that rivals will match price cuts but ignore price increases
c. reluctant to change prices because they anticipate that rivals will ignore price cuts but match price increases
d. too quick to cut prices because they fail to anticipate that rivals may also cut their prices.
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