Economics of internet

Suppose that it is possible to provide internet backbone capacity at a constant marginal capital investment of $5 per megabit per second (mb/s). There are no marginal costs. There are two time periods during the day (for simplicity each will be 12 hours): day and night. During the peak period (daytime) of 250 business days per year, the demand for capacity during daytime for one day is given by Peak Demand: P = a- bQ Where P is the price for capacity during the period. During the off-peak period of those 250 days, demand is one-half that of the peak period for each possible price, Off peak Demand: P = a- 2bQ On other days, demand is zero. Assume that the interest rate is 10 pe... click for more

Probability distribution questions

I need to know if I have correctly answered the following questions. If not please explain why: Our book is Managerial Economics 8th edition. 1. A probability distribution: ANSWER B a. is a way of dealing with uncertainty b. lists all possible outcomes & the corresponding probabilities of occurrence c. shows only the most likely outcome in an uncertain situation d. both a & b e. both a & c 2. The variance of a probability distribution is used to measure risk because a higher variance is associated with: ANSWER A a. a wider spread of values around the mean b. a more compact distribution c. a lower expected value d. both a & b e. all of the above 3. Risks exists when... click for more

Expected profit, mean-variance, maximin, & maximax rule

A firm making production plans believes there is a 30% probability the price will be $10, a 50% probability the price will be $15%, and a 20% probability the price will be $20. The manager must decide whether to produce 6000 units of output (A), 8000 units (B) or 10000 units (C). The following table shows 9 possible outcomes depending on the output chosen and the actual price. Profit (loss)when price is $10 $15 $20 6,000 (A) ($200) $400 $1,000 Production 8,000 (B) ($400) $600 $1,600 10,000 (C) ($1,000) $800 $3,000 11. What is the expected profit if 6000 units are produced? a. $171 b. $840 c. $640 d. $340 e. $26... click for more

If a nation desires to have stable prices...

If a nation desires to have stable prices (or low inflation), why not simply pass a law that prohibits firms from changing prices?

Suppose you are the chairperson of the Fed's Board of Governors...

Suppose you are the chairperson of the Fed's Board of Governors at a time when the economy is depressed, and you are called to testify before a congressional committee. Write an explanation for an interrogatory senator outlining how your expansionary acts would operate and what would be the effects on the economy?