Income Elasticity

During the past year,MP sold 150,000pairs of brake shoes at an average wholesale price of $13per pair. This year, GNP per capita is expected to fall from $21,000 to 19000 as nation enters a steep recession. Without any price change, MP expects current year sales to fall to 100,000. a. Calculate the implied arc income elasticity of demand. b. Given the projected fall in income, sales mgr thinks current volume of 150,000 units can only be maintained with a price cut of $1 per unit. on this basis,calculate the implied arc price elasticity of demand. c. Holding all else equal, would a further increase in price result in higher or lower total revenue?

Costs of regulation

Holding supply conditions constant, the costs of regulation fall wholly on producers when: a. Ep= infinity b. Ep_>(greater than or equal to)1 c. Ep=1 d. Ep=0

Prices

When prices in monopolistically competitive markets exceed those in a perfectly competitive equilibrium, this difference is the cost of: a. information b. market power c. inefficiency d. product differentiation

costs of regulation- managerial economics

Market demand and marginal revenue relations for Glove-Box units are:P=$500,000-$250Q;MR=$500,000-$500Q;OSHA mandates that GB must install new eqpmt that will increase the $200,000 marginal cost of mfg to $250,000 per unit.The fixed expenses of $50million per yr will be unaffected. a.calculate GB's profit maximizing price/output combination and economicprofit before the installation of the OSHA mandated equipmt. b.calculate the same after the osha guidelines have been met. c.who pays the economic burden of meeting OSHA guidelines. (when I tried working this, for b. I had TR of 187,500,000; then subtracting costs: -50,000,000 + 250,000(500)=profit of 12,000,000. For part a. the profit was... click for more

Perfectly competitive firms

In the long run, firms will exit a perfectly competitive industry if: a. excess profits exceed zero., b.excess profits are less than zero., c.total profit equals zero., d.excess profits equal zero. Please explain.