“Government operations are often described as inefficient. In fact, they operate exactly as we would expect given their incentives.” What does this mean? The example used is the DMV – a monopoly that does not care about the customer. Is this an appropriate analogy? Would a monopoly care about its customers? Can you to draw an analogy between the firm and the DMV with respect to a firm’s relationships with employees and the assets it owns?
Answer to relevant QuestionsThe “grabbing hand” may be described as merely an essential business strategy. Explain what the strategy is and demonstrate how many resources a business should allocate to it.Explain the relationship between fixed costs, variable costs and revenue for determining when a firm should temporarily shut down.Many proponents of public transit argue that the service should be provided free to the public in metropolitan areas in order to reduce pollution and traffic congestion. Estimates by economists found the price elasticity of ...If a firm has two sets of customers, those who want the newest version of the product immediately and those who are more patient, how should it price its product?If average fixed costs equal $40 and average total costs equal $100 when output is 10, then total variable costs when output is 10 must be:a. $40b. $60c. $600d. $6,000
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