Not sure what happened, but I fixed the link. Also note this is the homework due a week from today. The one that is due tonight is on A Strategic Look at the Efficiency Principle.
With regards to the problem with market prices affecting the internal supply and demand, does one not set the marginal cost/benefit equal to the market price and solve for quantity?
So let's envision first that each division just deals with the market. Then as you suggested you can figure out how much the upstream division will supply and how much the downstream division will demand. In general those two amounts won't be the same.
Whichever is the smaller, that division does all its trade internally. Whichever is the larger, that division first trades internally and then does the rest of its trades on the market.
I'm still stuck with it as well. I got the answer for the quantity supplied by the upstream division but I'm struggling to figure out the quantity demanded by the downstream division
Can you do two answer these two questions? (1) What line in Excel workbook are you stuck on? (2) What formula are you trying to use when figuring this out? Please be sure you are using cell references in all the formulas.
I am having the same problem I set the Marginal Cost to the market price given, found the quantity but the entry keeps giving me (Incorrect). Same goes to the Marginal Benefit. Stuck on this problem.
I read your reply on Alan Krueger post, but I still don't understand it. I solved for the upstream division by setting ME=MR, but cannot figure out the downstream division. This is Cell B260, and it is the last question.
The question is asking for the amount demanded at the market price. Let's call that amount Q and let's call the market price P. The equation for the downstream demand is really the inverse demand curve. That equation is P = A - B*Q. If you solve that for Q, then you get Q = (A - P)/B. Use cell references for each of these. P is in cell F255.
I did the formula you did above and it shows the answer as incorrect. I'm unable to use the given cell references so I have to copy the data on the side and use those cell references.
I am having trouble in the Transfer_Pricing section of the excel homework square b118. It asks me to find the optimal output, or to set marginal benefit equal to marginal cost. Marginal benefit equals, 281-1.44q. Marginal cost equals 42+1.47q. When I set these equal to each other I get q=82.1305819. When I plug this answer it I am told it is wrong. Am I reading the problem incorrectly?
Are you using cell references or typing in decimals. If you are doing the latter it will be marked wrong because of roundoff error. This is what the tutorial was supposed to teach you.
The link is not working for me to pull up the excel file
ReplyDeleteNot sure what happened, but I fixed the link. Also note this is the homework due a week from today. The one that is due tonight is on A Strategic Look at the Efficiency Principle.
DeleteWith regards to the problem with market prices affecting the internal supply and demand, does one not set the marginal cost/benefit equal to the market price and solve for quantity?
ReplyDeleteDid you ever figure this out? I am having the same problem.
DeleteSo let's envision first that each division just deals with the market. Then as you suggested you can figure out how much the upstream division will supply and how much the downstream division will demand. In general those two amounts won't be the same.
DeleteWhichever is the smaller, that division does all its trade internally. Whichever is the larger, that division first trades internally and then does the rest of its trades on the market.
I'm still stuck with it as well. I got the answer for the quantity supplied by the upstream division but I'm struggling to figure out the quantity demanded by the downstream division
DeleteCan you do two answer these two questions? (1) What line in Excel workbook are you stuck on? (2) What formula are you trying to use when figuring this out? Please be sure you are using cell references in all the formulas.
DeleteThis comment has been removed by the author.
ReplyDeleteI am having the same problem I set the Marginal Cost to the market price given, found the quantity but the entry keeps giving me (Incorrect). Same goes to the Marginal Benefit. Stuck on this problem.
ReplyDeleteSee if what I wrote above to answer Alan Krueger is enough of an answer for you.
DeleteI read your reply on Alan Krueger post, but I still don't understand it. I solved for the upstream division by setting ME=MR, but cannot figure out the downstream division. This is Cell B260, and it is the last question.
DeleteThe question is asking for the amount demanded at the market price. Let's call that amount Q and let's call the market price P. The equation for the downstream demand is really the inverse demand curve. That equation is P = A - B*Q. If you solve that for Q, then you get Q = (A - P)/B. Use cell references for each of these. P is in cell F255.
DeleteI did the formula you did above and it shows the answer as incorrect. I'm unable to use the given cell references so I have to copy the data on the side and use those cell references.
DeleteThe cells are protected. So you need to make sure you are using the correct cell references. Other students have submitted this correctly.
DeleteI got it!
DeleteI am having trouble in the Transfer_Pricing section of the excel homework square b118. It asks me to find the optimal output, or to set marginal benefit equal to marginal cost. Marginal benefit equals, 281-1.44q. Marginal cost equals 42+1.47q. When I set these equal to each other I get q=82.1305819. When I plug this answer it I am told it is wrong. Am I reading the problem incorrectly?
ReplyDeleteAre you using cell references or typing in decimals. If you are doing the latter it will be marked wrong because of roundoff error. This is what the tutorial was supposed to teach you.
Delete