A requirement for acquiring a related firm to generate value is
a. it be profitable
b. you be profitable
c. y ou will alter operations because of the acquisition
d. all synergies between the firms were exploited before the acquisition
c
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Limit pricing in a contestable market sets the price at the highest level that ________
A) maximizes the profit of an entrant B) maximizes the profit of the existing firm C) maximizes the profit of both the existing firm and the entering firm D) inflicts a loss on an entrant
Borrowing to fund investment projects until the marginal rate of return falls to ________ is optimizing investment strategy for ________
A) the borrowing rate, businesses and governments B) the borrowing rate, businesses but not governments C) the borrowing rate, governments but not businesses D) zero, businesses and governments E) zero, governments but not businesses
The marginal social costs and abatement costs of a certain type of air pollution for a factory are given as:
MSC = -1121 + 22.5Q MCA = 879 - 17.5Q, where Q = units of pollution per day, and MSC and MCA are measured in dollars. The factory is located in a small town that is currently setting community standards. You have been hired to perform the analysis requested below. a. If the community wishes to set a pollution standard for the factory, what daily level of pollution should be allowed? b. As an alternative, some members of the town council favor an emissions tax for the factory. If a tax is implemented, at what level should the tax be set?
Generalizing using statistical discrimination is:
A. a rational response to being on the wrong end of an information asymmetry. B. a rational response, although government always steps in to prevent it. C. an irrational response and always leads to loss of surplus. D. All of these statements are true.