Suppose the marginal cost of writing a contract of length L is MC(L) = 10 + 2L.
Question:
a. MB(L) = 100.
b. MB(L) = 150.
c. What happens to the optimal contract length when the marginal benefit of writing a contract increases?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 62% (8 reviews)
a When the MB 100 the optimal contract length is 45 b Wh...View the full answer
Answered By
PALASH JHANWAR
I am a Chartered Accountant with AIR 45 in CA - IPCC. I am a Merit Holder ( B.Com ). The following is my educational details.
PLEASE ACCESS MY RESUME FROM THE FOLLOWING LINK: https://drive.google.com/file/d/1hYR1uch-ff6MRC_cDB07K6VqY9kQ3SFL/view?usp=sharing
3.80+
3+ Reviews
10+ Question Solved
Related Book For
Managerial Economics and Business Strategy
ISBN: 978-0071267441
7th Edition
Authors: Michael R. baye
Question Posted:
Students also viewed these Economics questions
-
Suppose the marginal benefit of writing a contract is $50, independent of its length. Find the optimal contract length when the marginal cost of writing a contract of length L is: a. MC(L) = 10 + 2L....
-
Suppose the marginal benefit of writing a contract is $ 100, independent of its length. Find the optimal contract length when the marginal cost of writing a contract of length L is: a. MC (L) = 30 +...
-
Suppose a bank estimates that the marginal cost of raising loanable funds to make a $10 million loan to one of its corporate customers is 4 percent, its nonfunds operating costs to evaluate and offer...
-
1. If net profit is $47,025; depreciation is $2,200; accounts receivable increases $5,056; accounts payable increases $4,673; and inventory declines $850; what is the operating cash flow for the...
-
One of Mendel's famous genetics experiments yielded 580 peas, with 428 of them green and 152 yellow. a. Find a 99% confidence interval estimate of the percentage of green peas. b. Based on his theory...
-
If for n = 1, 2,..., the r.v.s {Xn} and {Yn} are uniformly integrable, show that {Xn + Yn} are also uniformly integrable?
-
Coca-Cola is considered to have one of the most valuable brand names in the world. The firm has an after-tax operating margin of 20% on revenues of \($25\) billion. The capital invested in the firm...
-
Beginning and Ending Fund Balances. The following information is provided about the Village of Wymettes General Fund operating statement and budgetary accounts for the fiscal year ended June 30,...
-
problem pictured below: Consider the following couple, who are engaged to be married Assume that each person takes one exemption and the standard Married Filing Tax Rate Single Jointly deduction....
-
Consider the following two-factor model for the returns of three well-diversified assets (i.e., with no idiosyncratic risk): = 0.12 +6F +4F2, 0.04 + 1F+2F2, 0.01 - 1F + 3F2. TB = rc = (a) (10...
-
Discuss the impact of the following factors on the optimal method of procuring an input. a. Benefits from specialization. b. Bureaucracy costs. c. Opportunism on either side of the transaction. d....
-
The division of a large office services company that makes high-end copiers recently signed a five-year, $25 million contract for IT services from CGI Group, a Canadian information technology...
-
Explain why people are resistant to organizational change and how this resistance may be overcome.
-
What are three major steps or considerations that should enter into a feasibility study for a new computer system?
-
Reporting both favorable and unfavorable findings suggests: a. The full story, leaving out nothing. b. Objectivity. c. Excellent coverage. d. The willingness to write long reports. e. None of the...
-
Internal auditors can use audit software: a. If they understand basic data processing documentation. b. By reading an instruction manual. c. By carefully filling out forms provided by the software...
-
What ethical problems should you be aware of in searching social medial sites?
-
A file dump permits an internal auditor to: a. See what was buried in the computer. b. Compare successive programs. c. Examine scrapped tapes and disks. d. Read source programs. e. None of the above.
-
Paloma Villarreal has received three suggestions from her staff about how to address her firms liquidity problems. Suggestion 1. Reduce the firms inventory turnover rate. Suggestion 2. Reduce the...
-
Outline a general process applicable to most control situations. Using this, explain how you would develop a system to control home delivery staff at a local pizza shop.
-
Predict the approximate boiling point of (a) Ethylbenzene (b) Propylbenzene (c) P-xylene
-
If the nominal GDP is $559 billion in the base year, and it rises to 577 in Year 1, and 605 in Year 2, what is the real GDP in each year, given that the price index has risen from 100 to 104.5 in the...
-
The balance sheet that follows indicates the capital structure for Nealon Inc. Flotation costs are (a) 15 percent of market value for a new bond issue, and (b) $2.01 per share for preferred stock....
-
Percy Corporation was organized on January 1, 2010, with an authorization of 1,200,000 shares of common stock with a par value of $6 per share. During 2010, the corporation had the following capital...
-
P12-5) Create an orthographic projection of the following object. Draw an auxiliary view that shows the angled surface's true shape. Use partial views where appropriate. 0.75 0.25 R.25 120 1.75 2.00...
-
LAB 9 STREAMS ANSWER SHEET G. J. http://www.google.com/imgres?imgurl=http://www.igsb.uiowa.edu/ Refer to the image above. Match the areas marked "A" through "J" with the correct stream term. Use only...
-
Lab 2 Report ENGR 103/123- 2. Calculations/Theoretical Predictions - Potential Energy of the Spring a) Determine the Spring Constant 2 of 6 Using the fish scales provided, record the amount of force...
Study smarter with the SolutionInn App