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Short and Long-term costs business comparisons

DISCUSSION QUESTION.1 Short and Long-term costs business comparisons. Select directly comparison business concepts and generally discuss the FC, VC, break-even quantities, economies of scale and diseconomies of scale for each. Feel free to make assumptions, but don't get into detailed cost analysis. Here's a couple example/pairs: A food cart vs. Mom n Pop's Diner. (or MnP Diner vs. a nice Sit-down Gourmet Restaurant that seats 100); the home-based handy-man vs. Joe's plumbing and plumbing supply Store; Erica Smith's Attorney at Law sole practice vs. the Miami office of Holland & Knight PA. Focus on their likely overhead, MR and MC. Also, consider long-run, what should they set up today if doing a new start.

DISCUSSION QUESTION 2: High-, Middle-, and low-end retail. There is a bifurcation of the retail market. The low end (Dollar General, Dollar Tree, etc.) is doing great and should continue to do so for some time to come, and many high-end retailers (Tiffany's, Polaris, HOG, HOTT, etc.) are doing well. But the middle market is hurting (TGT, Sears, JCPenny's, etc.) Pick two publicly traded companies and compare them from before the recession through the recession and estimate where they will go into the next 5 to 10 years. Of the two companies, select from different levels with one being successful in the high- or low-end and one caught in the middle and struggling. For example, I might choose DG and SHLC. I can draw a chart of the two companies' stock prices at Yahoo Finance: http://finance.yahoo.com/q/ta?s=SHLD&t=2y&l=on&z=l&q=l&p=&a=&c=dg This is a log chart so you see DG stock going up close to 100% in 3 years while Sears is down about 40%. Ouch!:-( ... (But note that in economics we are concerned with revenues more than the price of the stock.)

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Discussion One: Fixed Costs Concept Analysis:

The directly comparison of the business concepts will be between the food cart business operation s and the MnP diner that is serviced to the clients in a fixed restaurant. Fixed costs are those costs that are held by the organization and do not change despite a positive or a negative alteration in the goods and services that are produced by the corporation. In the analysis of the food cart business operation, it is imperative to state that their fixed costs have been separated with its business activities with a plan to purchase equipments for the operations of the business. This is aimed at increasing the future profit margins of the business operations. The restaurant also plans in place a lease on a new building so that they will be able to reach their target audience more effectively. It is imperative to note that the fixed costs are those that do not change at an onset of organizational operations.

Variable Costs Analysis:

Variable costs are those expenses that can be altered in the act of promoting the operations of the company. The marginal costs of the products of the organization sums up to be the variable costs of the corporation. In the company comparison of the variable costs that are held by each organization, the food cart business concept will incur a lot of variable costs as it expands its operations. The MnP entity will have to lower variable costs due to the nature of its operations the long-term benefits of this analysis with be witnessed when the returns of the company will ...

Solution Summary

The short and long-term cost business comparisons are examined.

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