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Output & Costs

Bundling and Intrafirm Pricing

The Staples Company is composed of a marketing division and a production division. The marketing division packages and distributes a plastic item made by the production division. The demand cureve for the finished product sold by the marketing division is Po=200-3Qo where Po is the price (in dollars per pound) of the finished

Price and output

1) The following matrix shows the payoffs for an advertising game between Combra and Paka. The firms can choose to advertise or to not advertise. Numbers in the matrix represent profits; the first number in each cell is the payoff to Combra. (Numbers in millions.) Combra (rows)/Paka (columns) Advertise Donâ??t Advertise Adv

2. Advertising can enhance economics efficiency when it: 3. We would expect a cartel to achieve: 4. If a firm is hiring variable resources D and F in perfectly competitive input markets, it will minimize the cost of producing any level of output by employing D and F in such amounts that: 5. At its profit-maximizing output, a pure nondiscriminating monopolist achieves:

2. Advertising can enhance economics efficiency when it: A) increases brand loyalty B) expands sales such that firms achieve substantial economies of scale c) keeps new firm from entering profitable industries d) is undertaken by pure competitors 3. We would expect a cartel to achieve a) both allocative efficiency and pr

The demand for all goods and services

1. What does it mean to say that the demand for resources is a derived demand? Is the demand for all goods and services a derived demand? 2. Using the information in the following table, calculate the marginal revenue product (MRP = MPP X MR). Units of Resource Resources Total Output Price Price 1

Characteristic of Both Monopolistic Competition and Perfect Comp

Which of the following is a characteristic of both monopolistic competition and perfect competition? 1. Firms face singificant barriers to entry 2. A firm's marginal revenue curve is below its demand curve. 3. In the long run, a firm will earn zero economic profit. 4. In the long run, a firm will produce a level of output

Macroeconomics Test Preparation 6

I'm requesting assistance with the below questions in order to prepare for an exam. The course is "Macroeconomics" author: Robert J. Gordon 11th edition text. I'd appreciate any assistance with these questions? 32) According to the Monetarists, â??Policy activismâ? is difficult if not impossible to perform successfully

Analysis of costs

The Haverford Company is considering three types of plants to make a particular electronic device. Plant A is much more highly automated than plant B, which in turn is more highly automated than plant C. For each type of plant, average variable cost is constant so long as output is less than capacity, which is the maximum outp

The firm currently uses 50,000 workers to produce 200,000 units of output per day. The daily wage per worker is $80, and the price of the firm's output is $25. The cost of other variable inputs is $400,000 per day. Although you do not know the firm's fixed cost, you know that it is high enough that the firm's total costs exceed its total revenue. Assume that total fixed cost equals $1,000,000. Calculate the values for the following four formulas: ? Total Variable Cost = (Number of Workers * Worker's Daily Wage) + Other Variable Costs ? Average Variable Cost = Total Variable Cost / Units of Output per Day ? Average Total Cost = (Total Variable Cost +Total Fixed Cost) / Units of Output per Day ? Worker Productivity = Units of Output per Day / Number of Workers Then, assume that total fixed cost equals $3,000,000, and recalculate the values of the four variables listed above. For both cases, calculate the firm's profit or loss. For both sets of calculations, compare the firm's output price and the calculated average variable cost and average total cost. Should the firm shutdown immediately when the total fixed cost equals $1,000,000? Should the firm shut down immediately when the total fixed cost equals $3,000,000? For one of the cases, if the firm can operate at a loss in the short-run, how many employees need to be laid off in order for the company to break even? To calculate the number of workers to be laid off, divide the loss for the two situations by the daily wage per worker. Given a lower number of employees now working at the company, what is the change in worker productivity? Is the change in worker too large, and the firm should shut down immediately? Or in your opinion, can the workers increase their productivity, assuming that the units of output per day remain fixed at 200,000 units, so that the firm operates at a breakeven state? Provide a two to four page report to management of the firm that discusses what should be done. Be sure to show your work to support the decision you outline in your report.

The firm currently uses 50,000 workers to produce 200,000 units of output per day. The daily wage per worker is $80, and the price of the firm's output is $25. The cost of other variable inputs is $400,000 per day. Although you do not know the firm's fixed cost, you know that it is high enough that the firm's total costs exceed

Preventing Entry of Firms by a Monopoly

Please help me solve this problem...long-run effects. Your firm sells a very popular children's game. As the manager, you have received information that another firm is thinking about introducing a similar game. You have the following facts: Your average cost of production is constant at $20. At the current monopoly pr

Finding optimal number of workers

Based on the below information, if the wage rate is $500 and the price of output is $5, how many workers should the firm hire? Number of workers Output 0 0 1 50 2 110 3 300 4

Selling of New Stock

Byron Corporation's present capital structure, which is also its target capital structure, is 40% debt ad 60% common equity. Next year's net income is projected to be $21,000 and Bryan's payout ratio is 30%. The company's earnings and dividends are growing at a constant rate of 5%; the last dividend (D0) was $2.00; and the curre

Supply of money in the market notes

"Poor people are poor because they do not have very much money. Yet, central bankers keep money scarce. If poor people had more money, poverty could be eliminated." Evaluate the statement. Be sure to indicate whether or not you believe the statement is true, false, or uncertain. Just one or two paragraphs should be enough. Pl

Profit help

You are the manager of a firm that sells a commodity in a market that resembles perfect competition, and your cost function is C(Q)=Q +2Q2. Unfortunately, due to production lags, you must make your output decision prior to knowing for certain the price that will prevail in the market. You believe that there is a 60 percent cha

Cost-benefit notes

An accountant for a car rental company was recently asked to report the firm's costs of producing various levels of output. The accountant knows that the most recent estimate available of the firm's cost function is C(Q)=100+10Q+Q2 , where costs are measured in thousands of dollars and output is measured in thousands of hours re

"There is no such thing as a free lunch."

One of the lessons of economics is that "there is no such thing as a free lunch." That means that businesses, consumers and whole societies face tradeoffs whenever they make a decision. * Explain a decision that you have made at work or concerning your career. * Identify and explain the tradeoffs you faced.

marginal cost schedules

52. The Jones Company has the following cost schedule: Output Total Cost (Units) ($) 0 3000 50 3750 100 4275 150 4675 200 5000 250 5300 300 5700 350 6250 400 7050 450 8225 Prepare (a) average total cost and (b) marginal cost schedules for the firm.

I need help with the steps to figure out the answer to this problem.

I need help with the steps to figure out the answer to this problem. PRODUCTION ANALYSIS AND COMPENSATION POLICY / COST ANALYSIS AND ESTIMATION Marginal Rate of Technical Substitution. The following production table provides estimates of the maximum amounts of output possible with different combinations of two input fact

Cost of Equity/Cost of Capital & Common Stock

Byron Corporation's present capital structure, which is also its target capital structure, is 40% debt ad 60% common equity. Next year's net income is projected to be $21,000 and Bryan's payout ratio is 30%. The company's earnings and dividends are growing at a constant rate of 5%; the last dividend (D0) was $2.00; and the curre

Short-run average cost curve

Complete the following table (round each answer to the nearest whole number): Total Variable Fixed Marginal Average Avg. Avg. Fixed Var. Output Cost Cost Cost Cost Cost Cost Cost 0 1

Maximize Profit, Demand and TVC Functions

Please assist with parts a and b. Please show all your work so i can understand Thank you! The following is a demand function that has been estimated for a monopolistically competitive firm. Q = 320 - 2P If the firm's TVC function is TVC = 40Q - 1.5Q2 +1/3 Q3 Total fixed cost = $500 a. How much shou

Price, Total Cost and the Average Total Cost

Suppose a monopolistically competitive firm must build a production facility in order to produce a product. The fixed cost of this facility is FC=$24. Also the firm has a constant marginal cost, MC=$3. Demand for the product that the firm produces is given by P=27-3Q. The chart labels the quantity of output 1-9. I need to find t

Profit Maximization

Use the information about marginal cost and marginal revenue in the table below to determine the profit maximizing level of output Output 1 2 3 4 5 6 7 8 9 MC 10 11 13 16 20 25 31 38 48 MR 50 45 40 35 30 25 20 15 10

Breakeven point

A firm that has total fixed costs of $40,000 sells its output for $250 per unit and has an average variable cost of $150. If the firm's cost and revenue curves are linear, how much output must the firm product to break even?

Profit under monopolistic competition

Suppose a firm in monopolistic competition has the following demand schedule. Suppose the marginal cost is a constant $70. How much will the firm produce? Is this a long- or short-run situation? If the firm is earning above-normal profit, what will happen to this demand schedule? Price Quantity Price Quantity --------------

Business Case: The Ratio of Marginal Product

You were recently hired to replace the manager of the Roller Division at a major conveyor manufacturing firm, despite the manager's strong external sales record. Roller manufacturing is relatively simple, requiring only labor and a machine that cuts and crimps rollers. As you begin reviewing the company's production information,

Microeconomics

A firm currently uses 50,000 workers to produce 200,000 units of output per day. The daily wage per worker is $80, and the price of the firm's output is $25. The cost of other variable inputs is $400,000 per day. Although you do not know the firm's fixed cost, you know that it is high enough that the firm's total costs exceed it

Selecting optimal output level

Please refer problem 3 from the attached file for graph. The accompanying graph (bottom of this page) summarizes the demand and costs for a firm that operates in a monopolistically competitive market. a. What is firm's optimal output? b. What is firm's optimal price? c. What are the firm's maximum profits? d. What ad