Connect Access Card for Managerial Econnomics
Connect Access Card for Managerial Econnomics
9th Edition
ISBN: 9781259354335
Author: Michael Baye, Jeff Prince
Publisher: McGraw-Hill Education
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Chapter 3, Problem 16PAA

You are a manager in charge of monitoring cash flow at a major publisher. Paper books comprise 40 percent of your revenues, which grow about 2 percent annually. You recently received a preliminary report that suggests the growth rate in ebook reading has leveled off and that the cross-price elasticity of demand between paper books and ebooks is — 0.3. In 2016, your company earned about $600 million from sales of ebooks and about $400 million from sales of paper books. If the own price elasticity of demand for paper books is -2. how will a 4 percent decrease in the price of paper books affect your overall revenues from both paper book and ebook sales?

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Discuss the preferred deterrent method employed by the Zambian government to combat tax evasion, monetary fines. As noted in the reading the potential penalty for corporate tax evasion is a fine of 52.5% of the amount evaded plus interest assessed at 5% annually along with a possibility of jail time. In general, monetary fines as a deterrent are preferred to blacklisting of company directors, revoking business operation licenses, or calling for prison sentences. Do you agree with this preference? Should companies that are guilty of tax evasion face something more severe than a monetary fine? Something less severe? Should the fine and interest amount be set at a different rate? If so at why? Provide support and rationale for your responses.
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Price Elasticity of Supply; Author: Economics Online;https://www.youtube.com/watch?v=4bDIm3j-7is;License: Standard youtube license