Assume MACROSOFT is planning to develop and sell a new word processor. It estimates that R&D expenses will amount to $300,000 for this new software, and it will have to invest an additional $150,000 to advertise and distribute the new product. If MACROSOFT's managers are risk-neutral, they will undertake this project if the expected revenues from the sales of the new software are
A. at least $300,000.
B. at least $450,000.
C. at least $150,000.
D. at least $100,000.
Answer: B
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The Coase Theorem is the proposition that if the number of involved parties is low, if property rights ________ and transactions costs are ________, then private transactions are efficient
A) are nonexistent; low B) exist; high C) are nonexistent; high D) exist; low
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What will be an ideal response?
If the market price of oats is $2.5 per bushel and a farmer decides to sell at $2.8 per bushel, he is likely to sell:
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