My Paper Writer » Essay Blog » Business Essays Help » Economics Managerial Examples 4

Economics Managerial Examples 4

 

  1. Find the derivative of f(x) with respect to x of the following equations:
      1. What quantity of capital is used when labor is fixed at 64 and the Average Product of Capital is 1.6?
      2. If labor wages are $10, what price of capital will imply the quantity of capital found in (a) is profit-maximizing?
      3. Knowing nothing else but the production function, is this firm more likely to exist within a high-concentration industry or a low-concentration industry? Why?
    1. Explain why a specialized investment represents a risk to a firm considering the investment. Offer an example. Then offer an explanation why the firm would be willing to take on such a risk.
    2. Plexicorp, LLC manufactures specialized emergency pilings used when uncommonly strong weather events damage or destroy commercial docks. The key component in these pilings, transparent aluminum, is sourced from Doohan Engineering based on renewable 5-year contracts.
      1. Describe a circumstance that might lead to Plexicorp electing to not renew the contract when it expires, instead purchasing the component in spot-exchanges.
      2. Describe a circumstance that might lead to Plexicorp electing to negotiate a 10-year contract with DE.
      3. Describe a circumstance that might lead to Plexicorp acquiring DE for the purpose of sourcing its component in-house.
      4. Illustrate one of the above with a relevant graph.

 

 

 

  1. What is the Fundamental Economic Problem? How is a manager’s ability to take derivatives relevant to providing solutions to this problem?
  2. Red Hook Studios sells its product in a perfectly competitive market where other firms charge a price of $80/unit. RHS’s total costs are:
    1. Determine the profit-maximizing price and level of production.
    2. Calculate your firm’s maximum profits.
    3. What long-run adjustments to the industry should you expect? Explain.
  3. You are the manager at Blue Sky, a monopolistically competitive firm; your demand and total cost functions are given by and .
    1. Determine the profit-maximizing price and level of production
    2. Calculate your firm’s maximum profits.
    3. What long-run adjustments to the industry should you expect? Explain.
  4. Sluis Van Shipyards along with Electric Boat produce submarines for navies around the world in a tacit Cournot duopoly. Worldwide demand for submarines is:
    ; SVS cost function is .

    1. What is Sluis Van’s Marginal Revenue function?
    2. What is Sluis Van’s reaction function?
    3. If EB’s cost function were , what is the equilibrium production level of Sluis Van Shipyards?
    4. If EB’s cost function were to increase, at what marginal cost would the submarine shipbuilding industry devolve into a monopoly in the long-run?
    5. On a graph, illustrate the potential area of collusion between Sluis Van and Electric Boat to increase profits.
  5. Demand for good X is given by.
    1. What is the own price elasticity of demand for X?
    2. Is good Y a complement or substitute for X? Why?
    3. Is good Z a complement or substitute for X? Why?
    4. Is good X a normal or inferior good? Why?
    5. Should the seller of this good raise or lower the price of X to increase revenues? Why?
  6. You have two people: Alan, who is primarily interested in the equal distribution of social welfare; and Bryce, who is primarily interested in the allocative efficiency of resources. Assuming first degree price discrimination is technologically feasible, how would Alan and Bryce answer whether or not such price discrimination is desirable given a monopolized industry?

 

 

  1. Umbrella Corporation is the largest firm within an industry of “high” and HHI measures of industry concentration, a “high” Lerner Index, and no legislative (licensing, patent, or certification) barriers to entry. How does the intuition in the Stackleberg model of oligopoly help explain UC’s decision to expand production and production capacity?

 

  1. Would a Stackleberg oligopoly model be more likely in industrial conditions with:

 

  1. “High” and HHI indices, and a “low” Lerner index?
  2. “High” , and “low” HHI and Lerner indices?
  3. “Low” HHI, and “high” and Lerner indices?
  4. “Low” and HHI indices, and a “high” Lerner index?

Explain your reasoning.

  1. Optimum, LLC holds a monopoly license in their industry. They face a market demand of ; .
    1. What are TO’s maximum monopoly profits?
    2. By what percentage has the consumer surplus been reduced compared to the social optimum?
  2. Demonstrate mathematically that the marginal cost curve intersects the average cost curve at the minimum using the following formula:
    Hint: average cost is

Last Updated on April 27, 2019

Don`t copy text!