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High and rising inflationary rate has an effect of increasing interest rates. During inflation, money loses value and lenders (such as banks and other financial institutions) have to reflect an upward adjustment on the interest charged on loan-able funds (credit funds). High and rising inflation therefore increases the cost of capital/credit and the demand for funds is largely reduced in the economy, limiting the availability of investible funds. Moreover, the limited funds available will be invested in physical facilities which appreciate in value over time. It is also possible the diversion of investment portfolio (the amount available for investment) into speculative activities away from directly productive ventures
Wilfykil answered the question on February 7, 2019 at 07:07
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Define the term hyperinflation.
Date posted: February 7, 2019. Answers (1)
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What are the determinants of demand for labor?
Date posted: February 7, 2019. Answers (1)
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By use of diagrams, illustrate and explain the resultant changes on the equilibrium price and quantity from a simultaneous fall in price of a substitute and an increase in the cost of raw materials for a specific commodity.
Date posted: February 7, 2019. Answers (1)
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Date posted: February 7, 2019. Answers (1)
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A monopolistic firm with a linear demand curve finds that it can sell two units at Sh.12 or twelve units at Sh.2. Its fixed cost is Sh. 20 and its marginal cost is constant at Sh. 3 per unit. Derive and plot the following:
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Date posted: February 7, 2019. Answers (1)
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(Solved)
The table below represents a production function for a commodity X where capital is fixed and labor is variable.
Using the data in the table, plot the marginal product for labor.
Date posted: February 7, 2019. Answers (1)
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Illustrate and explain the three stages associated with the law of variable proportions
Date posted: February 7, 2019. Answers (1)
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Date posted: February 7, 2019. Answers (1)
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Date posted: February 7, 2019. Answers (1)
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Date posted: February 7, 2019. Answers (1)
- You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits....(Solved)
You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits. This firm is a monopolist which sells in two distinct markets, one of
which is completely sealed off from the other.
As part of the analysis, you establish that the total demand for the firm‟s output is given by the
following equation:
Q = 50 – 0.5P
and the demand for the firm‟s output in the two markets is given by the following equations:
Q1 = 32 – 0.4P1 and
Q2 = 18 – 0.1 P2
Where: Q = total output
P = Price
Q1 = Output sold in Market 1
Q2 = Output sold in Market 2
P1 = Price charged in Market 1
P2 = Price charged in Market 2
The cost of production is given by C = 50 + 40Q
Where C = total cost of producing bread.
How much profit would the firm earn if it sold the output at a single price, and if it discriminates?
Date posted: February 7, 2019. Answers (1)
- You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits....(Solved)
You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits. This firm is a monopolist which sells in two distinct markets, one of
which is completely sealed off from the other.
As part of the analysis, you establish that the total demand for the firm‟s output is given by the
following equation:
Q = 50 – 0.5P
and the demand for the firm‟s output in the two markets is given by the following equations:
Q1 = 32 – 0.4P1 and
Q2 = 18 – 0.1 P2
Where: Q = total output
P = Price
Q1 = Output sold in Market 1
Q2 = Output sold in Market 2
P1 = Price charged in Market 1
P2 = Price charged in Market 2
The cost of production is given by C = 50 + 40Q
Where C = total cost of producing bread.
What price must be charged in each market in order to maximize profits?
Date posted: February 7, 2019. Answers (1)
- You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits....(Solved)
You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits. This firm is a monopolist which sells in two distinct markets, one of
which is completely sealed off from the other.
As part of the analysis, you establish that the total demand for the firm‟s output is given by the
following equation:
Q = 50 – 0.5P
and the demand for the firm‟s output in the two markets is given by the following equations:
Q1 = 32 – 0.4P1 and
Q2 = 18 – 0.1 P2
Where: Q = total output
P = Price
Q1 = Output sold in Market 1
Q2 = Output sold in Market 2
P1 = Price charged in Market 1
P2 = Price charged in Market 2
The cost of production is given by C = 50 + 40Q
Where C = total cost of producing bread.
Determine the total output that the firm must produce in order to maximize profits.
Date posted: February 7, 2019. Answers (1)
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C = a + bYd
Where Yd = Y – T
And Y = Income
...(Solved)
Given a hypothetical consumption function of the form:
C = a + bYd
Where Yd = Y – T
And Y = Income
T = Taxes and that:
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Multiplier.
Date posted: February 7, 2019. Answers (1)
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Date posted: February 7, 2019. Answers (1)
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Date posted: February 7, 2019. Answers (1)
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Date posted: February 6, 2019. Answers (1)
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Date posted: February 6, 2019. Answers (1)
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Date posted: February 6, 2019. Answers (1)
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Determine the equilibrium quantity and price by graphical method(Solved)
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Determine the equilibrium quantity and price by graphical method
Date posted: February 6, 2019. Answers (1)