Questions from Managerial Economics

Q: Two months ago, the owner of a car dealership (and

Two months ago, the owner of a car dealership (and a current football star) significantly changed his sales manager’s compensation plan. Under the old plan, the manager was paid a salary of $6,000 per...

Q: Last year, MedSupplies—a national supplier of medical devices—

Last year, MedSupplies—a national supplier of medical devices—posted its first loss in six years. The loss was a surprise to investors because the industry as a who...

Q: Analysts at a digital marketing firm collected data on the firm’s extent

Analysts at a digital marketing firm collected data on the firm’s extent of website analysis (X), along with the cost per customer (C), and the ad revenue per customer (R). Using reg...

Q: As the manager of a focus group company, you are interested

As the manager of a focus group company, you are interested in optimizing the number of participants you include in focus groups for your clients. Over the past year, you ran a field experiment, varyi...

Q: Southwest Airlines begins a “Bags Fly Free” campaign, charging

Southwest Airlines begins a “Bags Fly Free” campaign, charging no fees for the first and second checked bags. Does this situation best represent producer–producer rivalry, consumer rivalry, or consume...

Q: What is the maximum amount you would pay for an asset that

What is the maximum amount you would pay for an asset that generates an income of $250,000 at the end of each of five years if the opportunity cost of using funds is 8 percent?

Q: Suppose that the total benefit and total cost from a continuous activity

Suppose that the total benefit and total cost from a continuous activity are, respectively, given by the following equations: B(Q) = 100 + 36Q − 4Q2 and C(Q) = 80 + 12Q. [Note: MB(Q) = 36 − 8Q and MC(...

Q: The demand curve for product X is given by Qx d =

The demand curve for product X is given by Qx d = 500 − 4Px. (LO2) a. Find the inverse demand curve. b. How much consumer surplus do consumers receive when Px = $50? c. How much consumer surplus do co...

Q: Suppose demand and supply are given by Qd = 60 − P

Suppose demand and supply are given by Qd = 60 − P and Qs = P − 20. a. What are the equilibrium quantity and price in this market? b. Determine the quantity demanded, the quantity supplied, and the ma...

Q: Forey Inc. competes against many other firms in a highly competitive

Forey Inc. competes against many other firms in a highly competitive industry. Over the last decade, several firms have entered this industry and, as a consequence, Forey is earning a return on invest...