Managerial Economics And Business Strategy 9th Edition (without Access Code)
9th Edition
ISBN: 9781260263176
Author: Michael R. Baye, Jeffrey T. Prince
Publisher: McGraw Hill
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter CS, Problem 1CBE
To determine
To explain: The revenue will increase or not.
Expert Solution & Answer
Answer to Problem 1CBE
Yes the revenue will be increased.
Explanation of Solution
Consider the profit formula,
Where,
Now, consider the table shown below,
| Price | No. of Subscribers | Cost of license fees | Divisional, general and adm costs | TR | TC | Profit |
| 5 | 29.974 | 134.883 | 14.5 | 149.87 | 149.383 | 0.487 |
| 6.5 | 22.657 | 101.956 | 14.5 | 147.2705 | 116.456 | 30.8145 |
| 7 | 19.897 | 89.537 | 14.5 | 139.279 | 104.037 | 35.242 |
| 7.5 | 16.671 | 75.017 | 14.5 | 125.0325 | 89.517 | 35.5155 |
| 8 | 20.492 | 92.213 | 14.5 | 163.936 | 106.713 | 57.223 |
| 8.5 | 20 | 89.998 | 14.5 | 170 | 104.498 | 65.502 |
| 9 | 19.76 | 88.92 | 14.5 | 177.84 | 103.42 | 74.42 |
| 9.5 | 17.123 | 77.053 | 14.5 | 162.6685 | 91.553 | 71.1155 |
| 10 | 12.643 | 56.896 | 14.5 | 126.43 | 71.396 | 55.034 |
| 10.5 | 12.785 | 57.532 | 14.5 | 134.2425 | 72.032 | 62.2105 |
| 11 | 12.216 | 54.974 | 14.5 | 134.376 | 69.474 | 64.902 |
| 11.5 | 13.246 | 59.608 | 14.5 | 152.329 | 74.108 | 78.221 |
| 12 | 8.637 | 38.867 | 14.5 | 103.644 | 53.367 | 50.277 |
| 12.5 | 10.595 | 47.78 | 14.5 | 132.4375 | 62.28 | 70.1575 |
| 14 | 2.739 | 12.326 | 14.5 | 38.346 | 26.826 | 11.52 |
| 14.5 | 5.291 | 23.809 | 14.5 | 76.7195 | 38.309 | 38.4105 |
| 15 | 3.051 | 13.73 | 14.5 | 45.765 | 28.23 | 17.535 |
Figure-1
Consider figure-1, the profit is maximized at Price of
Economics Concept Introduction
The profit is obtained by subtracting the product of price and number of subscribers with the total cost.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
General Accounting Question solution and give me Blank ? C
It is possible to use transformational leadership strategies to reach unethical objectives.
Traditional leadership theories and morals standards are not adequate to help employees solve complex organizational issues.
For the statement above, argue in position for both in favor or opposed to the statements.
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.
Chapter CS Solutions
Managerial Economics And Business Strategy 9th Edition (without Access Code)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- answerarrow_forwardDiscuss 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.arrow_forwardNot use ai pleasearrow_forward
- For the statement below, argue in position for both in favor or opposed to the statement. Incompetent leaders can't be ethical leaders. Traditional leadership theories and moral standards are not adequate to help employees solve complex organizational issues.arrow_forwardpresentation on "Dandelion Insomnia." Poemarrow_forwardDon't used Ai solutionarrow_forward
- "Whether the regulator sells or gives away tradeable emission permits free of charge, the quantities of emissions produced by firms are the same." Assume that there are n identical profit-maximising firms where profit for each firm is given by π(e) with л'(e) > 0; π"(e) < 0 and e denotes emissions. Individual emissions summed over all firms gives E which generates environmental damages D(E). Show that the regulator achieves the optimal level of total pollution through a tradeable emission permit scheme, where the permits are distributed according to the following cases: Case (i) the firm purchases all permits; Case (ii) the firm receives all permits free; and Page 3 of 5 ES30031 Case (iii) the firm purchases a portion of its permits and receives the remainder free of charge.arrow_forwardcompare and/or contrast the two plays we've been reading, Antigone and A Doll's House.arrow_forwardPlease answer step by steparrow_forward
- Suppose there are two firms 1 and 2, whose abatement costs are given by c₁ (e₁) and C2 (е2), where e denotes emissions and subscripts denote the firm. We assume that c{(e) 0 for i = 1,2 and for any level of emission e we have c₁'(e) # c₂' (e). Furthermore, assume the two firms make different contributions towards pollution concentration in a nearby river captured by the transfer coefficients ε₁ and 2 such that for any level of emission e we have C₂'(e) # The regulator does not know the resulting C₁'(e) Τι environmental damages. Using an analytical approach explain carefully how the regulator may limit the concentration of pollution using (i) a Pigouvian tax scheme and (ii) uniform emissions standards. Discuss the cost-effectiveness of both approaches to control pollution.arrow_forwardBill’s father read that each year a car’s value declines by 10%. He also read that a new car’s value declines by 12% as it is driven off the dealer’s lot. Maintenance costs and the costs of “car problems” are only $200 per year during the 2-year warranty period. Then they jump to $750 per year, with an annual increase of $500 per year.Bill’s dad wants to keep his annual cost of car ownership low. The car he prefers cost $30,000 new, and he uses an interest rate of 8%. For this car, the new vehicle warranty is transferrable.(a) If he buys the car new, what is the minimum cost life? What is the minimum EUAC?(b) If he buys the car after it is 2 years old, what is the minimum cost life? What is the minimum EUAC?(c) If he buys the car after it is 4 years old, what is the minimum cost life? What is the minimum EUAC?(d) If he buys the car after it is 6 years old, what is the minimum cost life? What is the minimum EUAC?(e) What strategy do you recommend? Why? Please show each step and formula,…arrow_forwardO’Leary Engineering Corp. has been depreciating a $50,000 machine for the last 3 years. The asset was just sold for 60% of its first cost. What is the size of the recaptured depreciation or loss at disposal using the following depreciation methods?(a) Straight-line with N = 8 and S = 2000(b) Double declining balance with N = 8(c) 40% bonus depreciation with the balance using 7-year MACRS Please show every step and formula, don't use excel. The answer should be (a) $2000 loss, (b) $8000 deo recap, (c) $14257 dep recap, thank you.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning