Micro Help, Marginal Product, Total Revenue

Apr 16th, 2015
RockCafe
Category:
Accounting
Price: $10 USD

Question description

1. The Bungalow Bill Accounting Service, LLC uses computer technology and data-entry operators to provide accounting services in a competitive market. The price for each statement is $200.  Total fixed costs are $1500/week.
(10 points)

Data Entry Operators

# of Statements per week

Marginal Product

Total Revenue

0

0.0

1

5.0

2

9.0

3

12.0

4

14.0

5

15.5

6

16.5

7

17.0

How many data entry operators would BBAS, LLC hire at a weekly wage of $250 if Bill were attempting to maximize profits?

Determine the firm’s profits.

Suppose a decrease in demand reduces the market price to $150 per statement. 

Should Bill stay open in the short run?  Why?

Should Bill return to being a tiger hunter in the long run?  Provide a brief explanation.

Firm

Market Share

AB InBev

40.6

Molson Coors

13.9

SABMiller

12.0

Constellation

6.0

Heineken

3.0

Yuengling

1.6

Dean Metro

1.5

Sam Adams

1.4

20 others @

1.0

2. As the lead research economist for the Department of Justice, you need to determine the effects of a proposed merger of AB InBev & Constellation.

(10 points)

What is the four-firm concentration ratio before the merger?

b. What is the industry HHI before the merger?

c. What is the industry HHI after the merger? 

d. Explain your recommendation for the merger (block or approve)? 

2.  Suppose society consists of five families whose incomes are $8,000, $12,000, $20,000, $40,000, and $80,000.

(5 points)

  1. What is the total income in this society?
  1. What percentage of total income is earned by the:

1)  poorest quintile?

2)  second quintile?

3)  third quintile?

4)  fourth quintile?

5)  richest quintile?

  1. Construct a Lorenz curve for this five-family economy.

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(Top Tutor) Daniel C.
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