Microeconomics (13th Edition)
13th Edition
ISBN: 9780134744476
Author: Michael Parkin
Publisher: PEARSON
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Chapter 11, Problem 15APA
a)
To determine
Long-term and short-term decisions.
b)
To determine
The riskier decision.
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6
In 1916, Henry Ford was quoted as saying the following:
"There are men who will pay $360 for a car who would not pay $440. We had in round numbers
500,000 buyers of cars on the $440 basis, and I figure that on the $360 basis we can
increase sales to possibly 800,000 cars for the year - less profit on each car, but more cars,
more employment of labor, and in the end we get all the total profit we ought to make."
If Ford's estimate as correct, what was the price elasticity of demand for his cars?
By how much did total revenue increase?
7
Using the data from question 6, above, write the demand curve equation for Henry Ford's
cars.
8
Using the demand curve equation from question 7, build a graphic to sell Ford cars to the
public in 1916.
6
In 1916, Henry Ford was quoted as saying the following:
"There are men who will pay $360 for a car who would not pay $440. We had in round numbers
500,000 buyers of cars on the $440 basis, and I figure that on the $360 basis we can
increase sales to possibly 800,000 cars for the year - less profit on each car, but more cars,
more employment of labor, and in the end we get all the total profit we ought to make."
If Ford's estimate as correct, what was the price elasticity of demand for his cars?
By how much did total revenue increase?
10. Read this excerpt from the October 18, 2022, Wall Street Journal.
KINDERHOOK, N.Y.—Golden Harvest Farms has grown from a small apple-growing operation when Doug Grout’s grandfather opened it after World War II, to a multipronged business that includes a retail stand, cider press, distillery, tasting room and barbecue restaurant.
But Mr. Grout said he sees a cloudier future for the business due to new state regulations that will require him to increasingly pay more overtime to the farmworkers who pick his apples in the coming years, raising one of his primary costs.
“We were looking to buy another orchard, and that whole thing is tabled,” said Mr. Grout, 52 years old, who co-owns Golden Harvest with his father, as he drove between rows of Honeycrisp trees. “We’re stepping away. You’re going to see farms go out of business. This is very shortsighted.”
For the apple market in New York, the new regulations will:
Cause supply to shift to the left, leading to higher prices and a…
Chapter 11 Solutions
Microeconomics (13th Edition)
Ch. 11.1 - Prob. 1RQCh. 11.1 - Prob. 2RQCh. 11.2 - Prob. 1RQCh. 11.2 - Prob. 2RQCh. 11.2 - Prob. 3RQCh. 11.3 - Prob. 1RQCh. 11.3 - Prob. 2RQCh. 11.3 - Prob. 3RQCh. 11.3 - What is the shape of the AFC curve and why does it...Ch. 11.3 - Prob. 5RQ
Ch. 11.4 - Prob. 1RQCh. 11.4 - Prob. 2RQCh. 11.4 - Prob. 3RQCh. 11.4 - Prob. 4RQCh. 11.4 - Prob. 5RQCh. 11 - Prob. 1SPACh. 11 - Prob. 2SPACh. 11 - Prob. 3SPACh. 11 - Prob. 4SPACh. 11 - Prob. 5SPACh. 11 - Prob. 6SPACh. 11 - Prob. 7SPACh. 11 - Prob. 8SPACh. 11 - Prob. 9SPACh. 11 - Prob. 10SPACh. 11 - Prob. 11SPACh. 11 - Prob. 12SPACh. 11 - Prob. 13SPACh. 11 - Prob. 14SPACh. 11 - Prob. 15APACh. 11 - Prob. 16APACh. 11 - Prob. 17APACh. 11 - Prob. 18APACh. 11 - Prob. 19APACh. 11 - Prob. 20APACh. 11 - Prob. 21APACh. 11 - Prob. 22APACh. 11 - Prob. 23APACh. 11 - Prob. 24APACh. 11 - Prob. 25APACh. 11 - Prob. 26APACh. 11 - Prob. 27APACh. 11 - Prob. 28APACh. 11 - Prob. 29APACh. 11 - Prob. 30APACh. 11 - Prob. 31APACh. 11 - Prob. 32APA
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