Assume you are the manager of Abba Cable Company, which provides

Assume you are the manager of Abba Cable Company, which provides commercial communication services to the town of Canyon Lake, Texas. Because of licensing restrictions in the market, only your company and two others (Babba and Cabba) are allowed to operate in this market. The three companies decide to form a cartel and divide the market shares such that each company will provide services that will maximize its profits. The licensing restrictions allow each company to sell as much as it wants at a price ceiling of $2,200. You have the following output and MC data for each company:

Output MC ($)
Q Abba Babba Cabba
1,000 2,500 2,600 2,700
2,000 2,400 2,300 2,500
3,000 2,200 2,100 2,300
4,000 2,000 2,000 2,100
5,000 2,100 2,200 2,200
6,000 2,200 2,500 2,300

Calculate the industry output and market share at the current price of $2,200, assuming the prices are stable and unlikely to change.

Assume the current prices in the market are challenged by the regulatory agency, resulting in a new maximum price of $2,000. How will this change the industry output and market share for each company?

Is there any incentive for any company to cheat under either of the conditions in tasks a and b? Why or why not?
Create your report in a 2- to 3-page Microsoft Word document

Q Short Answer Questions. Please address the following questions.

Q Short Answer Questions. Please address the following questions. Total page requirement is 4 pages. Times New Roman. Font 12.

1. Suppose the economy experiences a recessionary gap. How does the new classical approach to macroeconomic policy (to eliminate the gap) differ from the Keynesian approach? Compare and contrast the classical and Keynesian views of aggregate demand and aggregate supply.

2. Explain one real-world event that supports the Classical theory and Keynesian theory (two separate events for each theory).

3. Do you think there are certain economic crises that require government intervention (i.e Great Depression, Auto Industry failure, etc.)? Why or why not? (There is no right or wrong answer, but be sure to support your ideas.)

4. Read the case assignment readings below and answer the question below:

Bernanke, Ben S. (2009) “The Crisis and the Policy Response” (speech, London School of Economics, January 13, 2009).

Uchitelle, Louis. (2009) “Economists Warm to Government Spending but Debate Its Form,” New York Times, January 7, 2009, p. B1.

In dealing with the recession of 2008 why is it important for the Fed and Congress to coordinate monetary and fiscal policy measures?

Additional Requirements

Min Pages: 4

Phase 3 Individual Project Deliverable Length: 800–1,000

Phase 3 Individual Project
Deliverable Length: 800–1,000 words plus table

You are the owner of a small bread factory and are thinking of lowering costs and expanding. Your small-business advisors suggested that you first review your operations and make some technological changes. Complete the following:
•Explain what a technological change is and how you can use it to lower your costs.
•Assume that you thought of something innovative to change your process. Would it help you in the short run? How?

The next thing that your small business advisors asked you to do was to break down your costs and see what you can reduce.
•Develop a table that you believe shows the explicit fixed costs of the bread factory and the total amount of the costs.
•Describe your variable costs.
•Because you are not an expert yet on analyzing costs and optimal production levels, you decide to do a very simple analysis of your short-run fixed and variable costs if you expand. You decide that your only fixed cost will be the ovens and the variable costs will be the workers.

Quantity of Workers

Quantity of Ovens

Quantity of Loaves of Bread Produced

Cost of Ovens

Cost of Workers Per Week





































1.Graph the total cost and the average total cost.
2.Calculate the marginal product of labor, and add it to the table.
3.Calculate the average product of labor, and add it to the table.
4.What is the significance if one is greater than the other?
5.Although there seems to be a great demand for your bread, why would productivity decline when you hire more labor in the short run? How would that reflect on your production graph?
6.What are your marginal costs?
7.At what point do your marginal costs and your total costs intersect?
8.What happens to the total costs after this point?
9.Calculate your average total costs, your average fixed costs, and your average variable costs.
10.Is your marginal cost greater than or less than your average variable cost or your average total cost? What does that mean? Where do you want your marginal costs to be?
11.What happens to your average variable costs as your output goes up? Why is that?
12.Explain why in the bread-making business that, in the long run, all costs are variable and the average total costs equals the average variable costs. How would expanding the business affect the economies of scale? When would you have constant return to scale and diseconomies of scale? Provide examples.
13.Where is the optimal level of production and the optimal level of prices in the short run? Is there enough information to make a decision for the long run? What information do you need?

A company purchase a piece of manufacturing equipment for a

A company purchase a piece of manufacturing equipment for a rental purpose. The expected income is $10,000 the first year and increases $1,000 every year. thereafter. Its useful life is 5 years. Expenses are estimated to be $600 anually. if the purchase price is $75,000 and there is a salvage value of $25,000. The tax rate is 40% and the method of depreciation utilize by the company is the MACRS method. What is the after cash flow of this investment in year.