Economics Answers

Muhammad Raza Company is producer of pastries. The company hires an economist to determine the demand for its product. After months of hard work, the analyst tells the company that demand for the firms pastries (Qx) are given by the following equations:
Qx = 20,000-10,000Px+10I+1000Pc
Where Px is the price charged for Raza pastries, I is the income per capita and Pc is the price of pastries form competing producer. Using this information, the company’s manager wants to:
(i) Determine what effect a price increase would have on total revenues.
(ii) Evaluate how sale of pastries would change during a period of raising income.
(iii) Assess the probable impact if competing producers raise their prices
Assume that initial values of Px = $8, I = $18,00 and Pc = $10.

A firm's total revenue (TR) and total cost (TC) functions are:
TR=110Q-5Q^2 TC=10Q-Q^2+0.33Q^3
Determine: a) The output rate that maximizes total revenue.
b) The output rate that minimizes average cost.
c) The output rate that maximizes profit.
d) Equation for marginal revenue and average revenue.
e) Equation for marginal cost and average cost

how do you get total cost if you are given quantity, price, total revenue and average total cost?

If the cost per kilometre is $1.60, average utilisation 20 passengers per vehicle kilometre and average trip distance 10 kilometres what is the level of bus kilometres required to service this market?

If the cost per vehicle is $1.60, average utilisation 20 passengers per vehicle kilometre and average trip distance 10 kilometres
1 what is the level of bus kilometres required to service this market
2 what profits are being made
3 what type of profit is this normal or abnormal
4 what is the cost per passenger carried(as opposed to the cost per vehicle kilometre)
as this is perfect competition new firms may enter the market and compete this profits away what price therefore will ensure that only normal profits are made

If we assume that a given bus market is in perfect competition which charges a flat fare of $1 and if the formula for the total demand in the market is given by qd=250-60p where qd is the quantity demand at a given price. if we further assume constant returns to scale. (A)what is the total market demand at the $1 flat fare?
(B)if the market is shared by 4 firms what is the number of passengers carried by each company
(C)if the cost per kilometre is $1.60, average utilisation 20 passengers per vehicle kilometre and average trip distance 10 kilometre
1 what is the level of bus kilometres required to service this market
2 what profits are being made
3 what type of profit is this normal or abnormal
4 what is the cost per passenger carried(as opposed to the cost per vehicle kilometre)
(D) as this perfect competition, new firms may enter the market and compete this profits away . What price therefore will ensure that only normal profits are made
(E) the answer to part D should be the same as answer to C why

Robert Ryan General manger Chicago stars professional football team is currently negotiating a new contract with Ronnie smith, the team's star running back. Under league rules smith is now a free agent, which means that he is free to negotiate a contract with any other team in the league. Smith has presented Ryan with a final contract demand consisting of alternatives for a five year contract. If Ryan does not agree to one of these, smith will sign contract with another team. The alternative contract demands are:
A) A $2000, 000 bonus payment immediately, a payment of 500,000 dollars at the end of each of the next five years, and a deferred payment of 1000,000 at the end of fifth year of the contract.
B) A $500,000 bonus payment immediately, a payment of 300,000 dollars at the end of each of the next five years, and a deferred payment of 200,000 each payable at the end of years 11 through 20.
Ryan has determined that smith's value to the team over the next five years is about 3000,000 dollars (in terms of present value of additional revenue from gate receipts and television discounted at 12% per year) should Ryan accept one of smith's contract demands, if so, which one? Explain fully.

Zenith manufacturing is considering the purchase of a new machine that would have to be paid for in annual payments of Rs.5000 at the end of the each of the next four years. Having this machine would increase the firms profit by Rs.4500 per year for the next 15 years. These profits are also received at the end of each year. If the interest rate is 10%, should Zenith buy the machine?

For each of the following equations, determine whether demand is elastic, inelastic or unitary elastic at the given price.

a) P = 50 – 0.1Q and P = Rs. 20
b) 20P =1500-Q and P=Rs.5
c) 4P =100-Q and P=Rs. 20

central Banks occasionally employ expansionary monetary policy to realize certain economic objectives. Write detailed notes on the position of the Bank of Namibia with regard to the independence of its monetary policy.