Business, 27.03.2020 01:54 lashondrascott
Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. This firm has fixed costs of $10 million per year and a variable cost of $1 per bag no matter how many bags are produced. LO5
a. If this firm kept on increasing its output level, would ATC per bag ever increase? Is this a decreasing-cost industry?
b. If you wished to regulate this monopoly by charging the socially optimal price, what price would you charge? At that price, what would be the size of the firm's profit orloss? Would the firm want to exit the industry?
c. You find out that if you set the price at $2 per bag, consumers will demand 10 million bags. How big will the firm’s profit or loss be at that price?
d. If consumers instead demanded 20 million bags at a price of $2 per bag, how big would the firm’s profit or loss be?
e. Suppose that demand is perfectly inelastic at 20 million: bags, so that consumers demand 20 million bags no matter what the price is. What price should you charge if you want the firm to earn only a fair rate of return? Assume as always that TC includes a normal profit.
Answers: 3
Business, 22.06.2019 11:20
Camilo is a self-employed roofer. he reported a profit of $30,000 on his schedule c. he had other taxable income of $5,000. he paid $3,000 for hospitalization insurance. his self-employment tax was $4,656. he paid his former wife $4,000 in court-ordered alimony and $4,000 in child support. what is the amount camilo can deduct in arriving at adjusted gross income (agi)?
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Business, 22.06.2019 16:30
Suppose that electricity producers create a negative externality equal to $5 per unit. further suppose that the government imposes a $5 per-unit tax on the producers. what is the relationship between the after-tax equilibrium quantity and the socially optimal quantity of electricity to be produced?
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Business, 22.06.2019 17:40
Adamson company manufactures four lines of garden tools. as a result of an activity analysis, the accounting department has identified eight activity cost pools. each of the product lines is produced in large batches, with the whole plant devoted to one product at a time. classify each of the following activities or costs as either unit-level, batch-level, product-level, or facility-level. activities (a) machining parts. (b) product design. (c) plant maintenance. (d) machine setup. (e) assembling parts. (f) purchasing raw materials. (g) property taxes. (h) painting.
Answers: 2
Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of conc...
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