Please answer both A and B. I’m okay with short answers. A. Why can’t an individual firm raise its price by reducing out
Posted: Fri Jul 01, 2022 8:12 am
Please answer both A and B. I’m okaywith short answers.
A. Why can’t an individual firm raiseits price by reducing output or lower its price to increase salesvolume in a purely competitive market?
B. Jane quit her job at IBM where sheearned $50,000 a year. She cashed in $50,000 in corporatebonds that earned 10% interest annually to buy a mini-bus. Jane has decided to buy the mini-bus and set up a commuter servicebetween Lincoln and Omaha. There are 1000 people who will pay$400 a year each for the commuter service; $280 from each persongoes for gas, maintenance, insurance, and depreciation. Sheestimates that her entrepreneurial skills would have typicallyyielded a normal profit of $5,000 in another business.
Complete the following questions: (1)What are Jane’s total revenues? (2) What are Jane’s explicitcosts? (3) What is her accounting profit? (4) What is Jane’spure economic profit (loss)?
A. Why can’t an individual firm raiseits price by reducing output or lower its price to increase salesvolume in a purely competitive market?
B. Jane quit her job at IBM where sheearned $50,000 a year. She cashed in $50,000 in corporatebonds that earned 10% interest annually to buy a mini-bus. Jane has decided to buy the mini-bus and set up a commuter servicebetween Lincoln and Omaha. There are 1000 people who will pay$400 a year each for the commuter service; $280 from each persongoes for gas, maintenance, insurance, and depreciation. Sheestimates that her entrepreneurial skills would have typicallyyielded a normal profit of $5,000 in another business.
Complete the following questions: (1)What are Jane’s total revenues? (2) What are Jane’s explicitcosts? (3) What is her accounting profit? (4) What is Jane’spure economic profit (loss)?