Answered: Discuss the importance of transaction…

Discuss the importance of transaction costs. How are businesses harnessing the power of network effects during the COVID-19 pandemic?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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From the article: "The Centers for Disease Control and Prevention said..that keeping middle seats open [on airline flights] could sharply reduce the risk of exposure to the [Covid-19] virus." If tickets for all middle seats on a flight from Denver to Chicago are not sold: A - the fixed cost of the flight from Denver to Chicago would be less than if tickets for middle seats were sold. B - the profit from the flight from Denver to Chicago would be greater than if all tickets were sold. C - the airline selling the tickets would not be able to make a profit from this flight. D - passengers' willingness to pay for the other seats on the flight would decrease. E - the fixed cost of the flight from Denver to Chicago would not change.
Consider the case of global environmental problems that spill across international borders as a prisoner’s dilemma of the sort studied in Monopolistic Competition and Oligopoly. Say that there are two countries, A and B. Each country can choose whether to protect the environment, at a cost of 10, or not to protect it, at a cost of zero. If one country decides to protect the environment, there is a benefit of 16, but the benefit is divided equally between the two countries. If both countries decide to protect the environment, there is a benefit of 32, which is divided equally between the two countries. a. In Table, fill in the costs, benefits, and total payoffs to the countries of the following decisions. Explain why, without some international agreement, they are likely to end up with neither country acting to protect the environment.
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There are two firms, A and B, located on a mile stretch. Firm A has a marginal cost=$4, and Firm B has a marginal cost=$6. For both: N=potential clients in the area=4,000 V=max willingness to pay=$40 travel cost=$8/1mile Please find the best response functions for both firms and graph them.
Match the definition to each term listed below. Number 1 2 3 4 5 6 7 8 9 10 11 Definition A table that shows the payoffs each firm earns from every combination of firm strategies An agreement among firms to charge the same price or otherwise not to compete An option that is better than any alternative option regardless of what the other firm does An outcome of a strategic game from which neither rival wants to deviate A game outcome in which players seek to increase their mutual payoff A practice where one firm initiates a price change and the other firms follow the leader A game in which the firms choose their strategies at the same time One firm's gain must equal the other firm's loss A game in which the sum of Firms select their optimal strategies in a single time period without regard to possible interactions in subsequent time periods A game that occurs more than once the two firms' outcomes is positive Instructions: Enter a numeric response corresponding to the number of the…
Bevan’s Cycles, a chain of bike shops that were early adopters of an online business model, are trying to improve customer satisfaction from bike purchases. To do so, they are considering setting up a ‘fitting service’ to help customers get the perfect fit on their bikes, thus reducing bicycles returned. The way the service would operate is that customers will book a session with a ‘fitting expert’. This will involve the customer coming into the shop where they will be filmed riding a stationary bike (like you get at the gym) and then the film will be analysed by a computer system to give them the perfect fitting bike. At each bike shop, this will entail a fixed cost for installing the computer system for analysing each customer and a marginal cost for training each member of staff. The head office sets a budget of £10,000 if 2 members of staff are trained, and for the bigger stores £12,000 if 3 members of staff are trained. The total expense for this must be incurred in a single year.…
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Please no written by hand solution A local KFC franchisee is evaluating the number of fried chickens to produce each day. The following table shows the 4 alternatives, the states of nature and their payoffs Daily Supply 40 50 60 70 Daily Demand 40 $80 $0 -$80 -$160 50 $80 $100 $20 -$60 60 $80 $100 $120 $40 70 $80 $100 $120 $140 What would your decision be if the following rules are applied? (show your calculation) Maximax Maximin La Place Minimax-regret
Suppose there are two manufacturers of Electronics, Samsung and LG. When producing electronics, both of these companies emit pollution into the air. Currently each company emits 50 tons of pollution into the atmosphere. The government has recently introduced a policy to limit the amount of pollution these companies can omit by only giving them 25 pollution permits each. Each permit can be used to emit 1 ton of pollution or it can be sold to another manufacturer. For Samsung to reduce pollution it would cost $120 per ton of pollution, while for LG it would cost $40 per ton of pollution. If two companies decide to exchange permits with each other, what would we expect to happen? Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b с d Samsung and LG will emit 25 tons of pollution each. LG will no longer pollute and Samsung will not lower the amount it pollutes. Samsung will no longer pollute and LG will not lower the…
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The French autoroute network is composed of toll motorways with entrances marked as such. A motorist entering the network obtains a ticket from a toll booth and pays a toll when leaving the motorway. Given the number of vehicles traveling these routes, congestion at both entrances and exits is common. Suppose that four groups, each of 50 motorists, use an autoroute. The price each group is willing to pay, v, differs among groups and falls as the amount of congestion, c, increases in the following way: vij = vi max-cj; i, j = 0,..., 3, where vi max = 0.4 -0.1 * i euros per kilometer is the maximum group i is willing to pay to use the motorway and cj = 0.06 * j euros per kilometer is the loss in value as more groups use it. The marginal cost of using the autoroute, not including the marginal cost of congestion, is zero. a. If the toll charged for using the autoroute equals a motorist's marginal private cost-the price in a competitive market-how many vehicles per minute will use it? Which…