COMPLETE SOLUTION MANUAL for Managerial Economics and Business Strategy 10th Edition By Michael Baye, Jeff Prince|2025

,COMPLETE SOLUTION MANUAL
FOR Managerial Economics and
Business Strategy 10th Edition By
Michael Baye, Jeff Prince All
Chapters

,COMPLETE SOLUTION MANUAL FOR HN HN HN




Managerial Economics and Business Strategy 10th Edition
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By Michael Baye, Jeff Prince
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Chapter 1 HN




The Fundamentals of Managerial Economics
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Answers to Questions and Problems HN HN HN HN




1. This situation best represents producer-producer rivalry. Here, Southwest
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is a producer attempting to steal customers away from other producers in
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the form of lower prices.
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2. The maximum you would be willing to pay for this asset is the present value, which
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is
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250,000 250,000 250,000 250,000 250,000
𝑃𝑉 H N = + +, HN +, HN +,HN


(1 + (1 +
HN HN (1 + HN (1 + HN (1 + 0.08)5 HN HN



0.08)
HN
0.08)2 HN 0.08)3
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= $998,177.51
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3.
a. Net benefits are N(Q) = 20 + 24Q – 4Q2.
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b. Net benefits when Q = 1 are N(1) = 20 + 24 – 4 = 40 and when Q
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= 5 they are N(5) = 20 + 24(5) – 4(5)2 = 40.
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c. Marginal net benefits are MNB(Q) = 24 – 8Q.
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d. Marginal net benefits when Q  1 are MNB(1) = 24 – 8(1) = 16 and
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when Q
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 5 HN



they are MNB(5) = 24 – 8(5) = -16.
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e. Setting MNB(Q) = 24 – 8Q = 0 and solving for Q, we see that net
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benefits are maximized when Q = 3.
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f. When net benefits are maximized at Q = 3, marginal net benefits are
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zero. That is,
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MNB(3) = 24 – 8(3) = 0. HN HN H N HN HN HN




4.
a. The value of the firm before it pays out current dividends is
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1 + 0.06
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𝑃𝑉𝑓𝑖𝑟𝑚 = H N H N $400,000 ( HN
)
0.06 − HN


0.04 HN




= $21.2 million.
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Managerial Economics and Business Strategy, 10e
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Copyright © 2022 by McGraw-Hill Education. HN HN H N HN HN


All rights reserved.
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of McGraw-Hill
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Distribution of this document is illegal
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, b. The value of the firm immediately after paying the dividend is
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Page 2 HN Michael R. Baye & Jeffrey T.
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Copyright © 2022 by McGraw-Hill Education.
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All HN rights H N reserved. H N No HN reproduction or distribution without the prior written
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Downloaded by: QUIVERS | HN HN HN Want to earn
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Distribution of this document is illegal
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