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Managerial Economics & Business Strategy, 10e Michael Baye, Jeff Prince, 2021 Instructor Solution Manual


Managerial Economics & Business Strategy, 10e Michael Baye, Jeff Prince, 2021 Instructor Solution Manual

Managerial Economics & Business Strategy

( Instructor Solution Manual)

Managerial Economics & Business Strategy, 10e Michael Baye, Jeff Prince, 2021 Instructor Solution Manual

Edition: 10 Edition

Author Name: Michael Baye, Jeff Prince

contact:

Whatsapp +1 (949) 734-4773

 

for the Facebook page click here 

 

for more books  for  ( Test Bank and Solution Manual) click here

 

For Test Bank click here

 

sample free

 

Chapter 1

The Fundamentals of Managerial Economics

Answers to Questions and Problems

 

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Managerial Economics & Business Strategy, 10e Michael Baye, Jeff Prince, 2021 Instructor Solution Manual

Managerial Economics & Business Strategy

( Instructor Solution Manual)

Managerial Economics & Business Strategy, 10e Michael Baye, Jeff Prince, 2021 Instructor Solution Manual

Edition: 10 Edition

Author Name: Michael Baye, Jeff Prince

contact:

Whatsapp +1 (949) 734-4773

 

for the Facebook page click here 

 

for more books  for  ( Test Bank and Solution Manual) click here

 

For Test Bank click here

 

sample free

 

Chapter 1

The Fundamentals of Managerial Economics

Answers to Questions and Problems

 

 

  1. This situation best represents producer-producer rivalry. Here, Southwest is a producer attempting to steal customers away from other producers in the form of lower prices.

 

  1. The maximum you would be willing to pay for this asset is the present value, which is

 

 

 

    1. Net benefits are N(Q) = 20 + 24Q – 4Q2.
    2. Net benefits when Q = 1 are N(1) = 20 + 24 – 4 = 40 and when Q = 5 they are N(5) = 20 + 24(5) – 4(5)2 = 40.
    3. Marginal net benefits are MNB(Q) = 24 – 8Q.
    4. Marginal net benefits when are MNB(1) = 24 – 8(1) = 16 and when  they are MNB(5) = 24 – 8(5) = -16.
    5. Setting MNB(Q) = 24 – 8Q = 0 and solving for Q, we see that net benefits are maximized when Q = 3.
    6. When net benefits are maximized at Q = 3, marginal net benefits are zero. That is, MNB(3) = 24 – 8(3) = 0.

 

    1. The value of the firm before it pays out current dividends is

 

 

.

 

  1. The value of the firm immediately after paying the dividend is

 

 

.

 

  1. The present value of the perpetual stream of cash flows. This is given by

 

 

 

  1. The completed table looks like this:

 

Control Variable

Q

Total Benefits

B(Q)

Total

Cost

C(Q)

Net Benefits

N(Q)

Marginal Benefit

MB(Q)

Marginal Cost

MC(Q)

Marginal Net

Benefit

MNB(Q)

100 1200 950 250 210 60 150
101 1400 1020 380 200 70 130
102 1590 1100 490 190 80 110
103 1770 1190 580 180 90 90
104 1940 1290 650 170 100 70
105 2100 1400 700 160 110 50
106 2250 1520 730 150 120 30
107 2390 1650 740 140 130 10
108 2520 1790 730 130 140 -10
109 2640 1940 700 120 150 -30
110 2750 2100 650 110 160 -50

Chapter 1

The Fundamentals of Managerial Economics

Answers to Questions and Problems

 

 

  1. This situation best represents producer-producer rivalry. Here, Southwest is a producer attempting to steal customers away from other producers in the form of lower prices.

 

  1. The maximum you would be willing to pay for this asset is the present value, which is

 

 

 

    1. Net benefits are N(Q) = 20 + 24Q – 4Q2.
    2. Net benefits when Q = 1 are N(1) = 20 + 24 – 4 = 40 and when Q = 5 they are N(5) = 20 + 24(5) – 4(5)2 = 40.
    3. Marginal net benefits are MNB(Q) = 24 – 8Q.
    4. Marginal net benefits when are MNB(1) = 24 – 8(1) = 16 and when  they are MNB(5) = 24 – 8(5) = -16.
    5. Setting MNB(Q) = 24 – 8Q = 0 and solving for Q, we see that net benefits are maximized when Q = 3.
    6. When net benefits are maximized at Q = 3, marginal net benefits are zero. That is, MNB(3) = 24 – 8(3) = 0.

 

    1. The value of the firm before it pays out current dividends is

 

 

.

 

  1. The value of the firm immediately after paying the dividend is

 

 

.

 

  1. The present value of the perpetual stream of cash flows. This is given by

 

 

 

  1. The completed table looks like this:

 

Control Variable

Q

Total Benefits

B(Q)

Total

Cost

C(Q)

Net Benefits

N(Q)

Marginal Benefit

MB(Q)

Marginal Cost

MC(Q)

Marginal Net

Benefit

MNB(Q)

100 1200 950 250 210 60 150
101 1400 1020 380 200 70 130
102 1590 1100 490 190 80 110
103 1770 1190 580 180 90 90
104 1940 1290 650 170 100 70
105 2100 1400 700 160 110 50
106 2250 1520 730 150 120 30
107 2390 1650 740 140 130 10
108 2520 1790 730 130 140 -10
109 2640 1940 700 120 150 -30
110 2750 2100 650 110 160 -50

 

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