This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Jane's Copy Services is in perfect competition. Jane currently charges 10 cents per page, which is ... (Read 128 times)

beccaep

  • Hero Member
  • *****
  • Posts: 535
on: Jun 29, 2018
Jane's Copy Services is in perfect competition. Jane currently charges 10 cents per page, which is the going market price.
 
  Jane thinks that she can increase her profit if she lowers her price to 8 cents per page to increase the demand for her service. Is Jane right? Why or why not?

Question 2

When would a risk averse individual not insure a risky event?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

mariahkathleeen

  • Sr. Member
  • ****
  • Posts: 337
Reply #1 on: Jun 29, 2018
Answer to Question 1

If Jane lowers her price, her profit will not increase. As a perfectly competitive firm, Jane can sell as much of her service as she wants at the going market price. And to maximize her profit, she should choose the quantity at which her marginal cost equals the market price. If Jane lowers the price, her total revenue, and hence profit, will fall.

Answer to Question 2

Risk averse individuals are always willing to pay more than the minimum cost of insurance up to a point. If the insurance is priced above the maximum price the individual is willing to pay, he or she will not buy the insurance.


beccaep

  • Member
  • Posts: 535
Reply 2 on: Jun 29, 2018
Gracias!

flexer1n1

  • Member
  • Posts: 373
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

Did you know?

Elderly adults are at greatest risk of stroke and myocardial infarction and have the most to gain from prophylaxis. Patients ages 60 to 80 years with blood pressures above 160/90 mm Hg should benefit from antihypertensive treatment.

Did you know?

Only one in 10 cancer deaths is caused by the primary tumor. The vast majority of cancer mortality is caused by cells breaking away from the main tumor and metastasizing to other parts of the body, such as the brain, bones, or liver.

Did you know?

A cataract is a clouding of the eyes' natural lens. As we age, some clouding of the lens may occur. The first sign of a cataract is usually blurry vision. Although glasses and other visual aids may at first help a person with cataracts, surgery may become inevitable. Cataract surgery is very successful in restoring vision, and it is the most frequently performed surgery in the United States.

Did you know?

In 2006, a generic antinausea drug named ondansetron was approved. It is used to stop nausea and vomiting associated with surgery, chemotherapy, and radiation therapy.

Did you know?

Looking at the sun may not only cause headache and distort your vision temporarily, but it can also cause permanent eye damage. Any exposure to sunlight adds to the cumulative effects of ultraviolet (UV) radiation on your eyes. UV exposure has been linked to eye disorders such as macular degeneration, solar retinitis, and corneal dystrophies.

Sexual swellings are one way for females to advertise their mating availability, thereby inducing ma Sexual swellings are one way for females to advertise their mating availability, thereby inducing ma
Richard Wrangham’s “female-bonded” theory of intergroup competition was highly influential in our un Richard Wrangham’s “female-bonded” theory of intergroup competition was highly influential in our un
The Laocoön Group, Roman copy, perhaps after Agesander, Athenodorus, and Polydorus of Rhodes. The Laocoön Group, Roman copy, perhaps after Agesander, Athenodorus, and Polydorus of Rhodes.
Participating in religious services is related to better coping skills, less severe stress ... Participating in religious services is related to better coping skills, less severe stress ...
effect of pH on ionization and charges of amines and carboxylic acid effect of pH on ionization and charges of amines and carboxylic acid
Perfect Cubes Perfect Cubes
Video: How Hemoglobin Picks Up and Delivers Oxygen

For a complete list of videos, visit our video library