Provide an analysis of the following question:
Does the presence of foreign firms help or hurt domestic competition? Give an example and be sure to describe whether the firms collaborate or compete for market share. It should be about two pages, and support your analysis by referencing and citing at least three credible sources.
The presence of foreign firms hurts domestic competition. The example is the automobile industry in the United States. The domestic competition has to use factors of production available in the United States and use available raw materials. If foreign firms are allowed, they can use factors of production from anywhere in the world and compete on price. The effect can be devastating and the local competition can be wiped out. In the US each of the big three US automakers, namely the General Motors, Ford Motor Company, and Chrysler requested emergency loans to address cash shortages. Of these General Motors and Chrysler faced bankruptcy and liquidation. The US government had to give financial bailout support to allow the companies to restructure debt through Chapter 11 bankruptcy.
Domestic industry was out-competed by foreign carmakers such as Toyota. Foreign carmakers were able to perform better because ...
This solution explains the impact of foreign firms on domestic competition. The sources used are also included in the solution.
Applying concepts of managerial economics.
I need help understanding and applying concepts of managerial economics.
1. The manager of American Box Company conducts a study and notes his 10 workers produce approximately 2,000 boxes per week. He assumes that if he can employ 20 workers, the number of boxes will increase to 4,000 per week, and if he can employ 30 workers, the number of boxes per week will reach 6,000. Explain why the manager's assumption is correct or incorrect.
2. ElectraCorp has been earning zero economic profit for the past six months. Would it be wise for ElectraCorp to cease operations? Why or why not?
3. What is economic profit?
4. The best price and cost scenario occurs when the price of the company's product equals marginal cost. Explain why this is so.
5. Why wouldn't it be better for the price of a product to exceed its marginal cost?
6. Describe the four market structures of pure competition, pure monopoly, monopolistic competition, and oligopoly.
7. Under the monopolistic competition model where the vast majority of firms operate, what role is played by product differentiation?
8. Why are entrepreneurs the most important people in the successful operation of many firms?
9. Describe the Coase theorem and its approach to solving the externality problem.
10. Some people believe that the minimum wage should be raised to $10.00 per hour "to help poor people escape from poverty." How would raising the minimum wage to $10.00 per hour actually harm poor people, businesses, and consumers in general?
11. As manager of Centrix Diagnostics Services, you receive exciting news from the R & D division that a new technological breakthrough (that will very soon be discovered by all other diagnostics service companies) will cut your firm's costs of providing services by 15%. Should you recommend the current price for the services be maintained after implementing the new technology in the hopes of earning a substantial profit, or will it be wiser to lower the price for the services? Explain.
12. How do tariffs imposed by the U.S. government on foreign-made steel impact the domestic price of U.S.-made steel?
13. Who gains and who loses from a tariff?
14. How will a quota imposed by the U.S. government on foreign-made machinery impact the domestic price of the same kind of machinery made by U.S. companies?
15. Who gains and who loses from a quota?
16. "We need all kinds of trade restrictions against foreign competition to protect American jobs!" Explain why this argument is seriously flawed.View Full Posting Details