Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Question
Chapter 11, Problem 8E
a)
To determine
To Evaluate: The following in the unregulated environment,
- Price to be charged by firm
- Output to be produced
- Total Profits
Rate of return that the firm earn on its asset base.
b)
To determine
To Evaluate: The following is the firm charges the price of $100 for each unit of output.
- Total Profits
- Rate of return that the firm earns on its asset base.
c)
To determine
To Evaluate: The following if the commission has ordered the firm to charge a price that will provide the firm with not more than a 10 percent return on its assets.
- Price charge by firm
- Output produced by firm
- Earned Dollar level of profits
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A firm operates with the production function Q = K2 L. Q is the number of units of output per day when the firm rents K units of capital and employs L workers each day. The manager has been given a production target: to produce 8,000 units per day. She knows that the daily rental price of capital is $400 per unit and the wage rate is $200 day.
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Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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