Suppose you are an analyst for the Coca-Cola Company. An individual's inverse demand for Coca-Cola is estimated to be P = 98 ? 4Q (in cents). If Coca-Cola is produced according to the cost function C(Q) = 1,000 + 2Q (in cents), compute the optimal price and the number of cans to sell as a single package.
A. $15 per package and 16.67 cans
B. $11.52 per package and 12 cans
C. $12 per package and 24 cans
D. $120 per package and 12 cans
Answer: C
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When the Fed lowers the required reserve ratio, it:
a. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public b. raises the cost of borrowing from the Fed, discouraging banks from making loans to the general public. c. increases the amount of excess reserves that banks hold, encouraging them to make loans to the general public. d. increases the amount of excess reserves that banks hold, discouraging them from making loans to the general public. e. decreases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.
A tax where wealthy people pay a larger percentage of their income than poor people is known as a(n)
a. excise tax b. flat tax c. proportional tax d. progressive tax e. regressive tax
Tax evasion is illegal, but tax avoidance is legal
a. True b. False Indicate whether the statement is true or false
The Fed is often considered the bankers' bank because it:
A. demands much more currency than it has available. B. no longer has a monopoly on printing paper currency. C. lowers the discount rate in order to restrict the money supply. D. holds bankers reserves, provides banks with currency and loans, and clears their checks.