Economics of Enterprise Answers

A private college adds a small café to its building to cater to the needs of its own students. The total cost of the facilities for the café is $100,000. After a year of operations the college determines that operating the café is interfering with its primary business of educating students. A group of enterprising␣ business students offer to purchase the café facilities for $50,000. The college balks at the idea because it had paid $100,000 for the facilities. The college spends $10,000 advertising the café for sale hoping to get an outside buyer willing to pay much more than the students and operate the café on campus. When no outside offer was forthcoming the students increased their offer to $55,000. Should the college take the student offer? Why or why not?

Q."A characteristic of oligopolistic market is that, once the general price level is established it tends to remain fixed for an extended period of time." Discuss the economic rationale underlying this phenomenon.
Q. In any firm of your choice, try to find the effect of change in demand and change in supply on price and quantity of product.
Q.What is opportunity cost? Explain with the help of an example, why assumption of constant opportunity cost is very unrealistic?

what is Marginal standing facility?how reducing its value helps?

If the supply is : q = 5p +150 and the demand is q = - 2 + 920 What is the price and the equilibrium quantity ?

what is monopolist and oligopolist

Assuming that the firm hires 10 units of capital and 20 units of labour, use the production function given in part a to compute the average and marginal products of labour.

Consider the following production function: Q = K L . Explain the special characteristics of this production function. How is it different from a Linear production function? How is it different from a Leontief production function?

5. The Golf Range is considering replacing their ball-dispensing machine at its facility. The old machine cost $50,000 five years ago, and currently is worth $10,000. The new machine would cost $76,000, would be depreciated on a straight-line basis over its seven-year life, and would have a zero salvage value. The anticipated income from the project is $34,000 a year with $14,400 of that amount being variable cost. There is also a fixed cost for maintenance every 2 years (yr 2, yr 4, yr 6) of $10,000. If the company’s RRR is 10%, should they purchase the new machine?

Outdoor Sports is considering adding a miniature golf course to its facility. The course would cost $138,000, would be depreciated on a straight-line basis over its five-year life, and would have a zero salvage value. The estimated income from the golfing fees would be $72,000 a year with $24,000 of that amount being variable cost. The fixed cost would be $11,600 only in year one. In addition, the firm anticipates an additional $14,000 in revenue each year from its existing facilities if the golf course is added. What is the IRR of this project?

What is the swapping window policy taken by RAGHURAM RAJAN(INDIA GOVERNER)