Each identical consumer has the following demand for golf, q = 100 - p, where q is the number of rounds of golf played per year and p is the price per round. The only golf course in an isolated town incurs a marginal cost of $10 per round of golf. It wishes to charge a membership fee and a fee per round of golf. What price will it set for each fee?
What will be an ideal response?
At a price of $10, consumer surplus is $4,050. The firm maximizes profit by setting the annual fee equal to $4,050 and charging a $10 per round fee.
Economics
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A) contractionary fiscal policy; high B) expansionary fiscal policy; low C) expansionary monetary policy; low D) contractionary monetary policy; low
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What happens to the intrinsic value of a call option that is out of the money if the price of the underlying futures contract declines?
A. The intrinsic value decreases. B. The intrinsic value remains zero. C. The intrinsic value remains equal to the time value. D. The intrinsic value increases.
Economics