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Output & Costs

Firms in Competitive Markets

The market for fertilizer is perfectly competitive. Firms in the market are producing output, but are currently making economic losses. (a) How does the price of fertilizer compare to the average total cost, the average variable cost, and the marginal cost of producing fertilizer? (b) Draw two graphs, side by side, illustr

Calculate real growth per capita

8. if nominal output is 250, and the price index is 150, what is real output? 3. Calculate real growth per capita in the following countries: a. Democratic Republic of Congo: population growth = 3.0 percent; real output growth = -1.8 present. b. Estonia: population growth = -0.4 percent; real output growth = 4.2 percent.

Inventory, Economic Quantity Model

The Western Jeans Company purchases denim from Cumberland Textile Mills. The Western Jeans Company uses 235,000 yards of denim per year to make jeans. The cost of ordering denim from the textile company is $250 per order. It costs Western $1.65 per yard annually to hold a yard of denim in inventory. Determine the optimal number

Derivation of the long-run supply curve

Would the accumulation of historical prices and quantities exchanged in the market establish a long-run supply curve? How would the historical relationship differ from how firms (and economists) envision today's long-run supply in the industry? I'm inclined to answer no to the first part of the question. To derive the compe


Burger Doodle is a fast-food restaurant that processes an average of 680 food orders each day. The average cost of each order is $6.15. Four percent of the orders are incorrect, and only 10% of the defective orders can be corrected with additional food items at an average cost of $1.75. The remaining defective orders have to be

Economics pertaining to efficient inventory systems of corporations.

Question: Sales are estimated to be 4,500 units annually at $3,000 each. The cost of each unit for Taylor Incorporated is $1,200. Inventory carrying cost is 5% of the cost value of the device. Order placement cost is $60. ------------------------------------------ 1. Identify the number of units to purchase. 2

Price Taking Firms Concept

I'm having a little trouble fully grasping the price-taker firm concept. I understand that there are two features of the demand facing a firm will ensure that the firm must act as a price taker: a. That other firms be willing to provide all that is demanded at the current price, and b. That consumers of the firm's output reg

Oligopoly Monopolistical Differentiated Products

Please record your answers in the Answer BOX. Thanks for your kind co-operation. ANSWER BOX Questions Answers Explanation 1.a . Explanation. 1.b Yes or No What is it? Provide justification for your choice. Thanks. 2a. N/A 2b. N/A 2c. N/A 2d. N/A 3. Working here please. Thanks.

Economic Costs vs. Accounting Costs

The following problem is proposed: World Airlines is thinking of buying a new plane for its shuttle service. Why does the economist's notion of cost suggest that World Airlines should consider the plane's price in deciding whether it is a profitable investment but that, once bought, the plane's price is not directly relevant

Monopoly and Monopolistic

Monopoly and Monopolistic Competition DQ1. There are four firms in an industry with the following market shares: Firm 1 30% Firm 2 25% Firm 3 25% Firm 4 20% a) Calculate the Herfindahl Hirschman Index for the industry. b) What is the number of effective competitors in this market? Show your calc

Cost Data (Excel application)

Assignment 1 Cost Data (Excel application) 1. Consider a firm that has just built a plant, which cost $20,000. Each worker costs $5.00 per hour. Based on this information and using Excel, fill in the missing information in the table below. Number of Worker Hours Output Marginal Product Fixed Cost Variable Cost To

Cost schedules

Consider a firm that has just built a small plant, which cost $4,000. Each unit requires $2.00 worth of materials. Each worker costs $7.00 per hour. Based on this information and using Excel, fill in the missing information in the table below. Number of worker hours Output Fixed Cost TVC TC MC A

Demand Curve

Explain why the demand curve facing a perfectly competitive firm is assumed to be perfectly elastic? (i.e. horizontal at the going market price). Just 1 or 2 sentences needed.

Estimate common stock

I am not good with excel and formulas. ABC Waterhouse's free cash flow next year will be $250 million and it is widely expected to grow at a 5 percent annual rate indefinitely. The company's weighted average cost of capital is 11 percent, the market value of its liabilities is $2.5 billion, and it has 32 million shares ou

Monopolist and Cartel

Assume that two companies (A and B) are duopolists who produce identical products. Demand for the products is given by the following linear demand function: P = 200 - QA - QB where QA and QB are the quantities sold by the respective firms and P is the selling price. Total Cost functions for the two companies are TC

How outsourcing is affected by education and lazy workers

A perfectly competitive firm has a MPL = 22-L. If P = 5 and w = $10/hr: (a) What is the optimal quantity of labor demanded? (b) Given these circumstances, how can the firm and the employee avoid outsourcing? (c) How does the "slacker" or "lazy" worker compound the other workers problems? This answer relates to the n

Microeconomics: Variable, Fixed, Explicit and Implicit costs

A firm's costs can be divided into fixed costs and variable costs. Identify each of the following as either a fixed or variable cost. Then, identify that same costs as being an explicit cost or an implicit cost. Give the rationale for each of your answers. Labor costs Materials costs Entrepreneur's profit Gasoline use

Monopolistic Competition and Oligopoly

Question 1 Monopolistically competitive firms: A .can earn economic profits or losses in both the short-run and the long-run. B. can earn either profits or losses in the short-run, but earn zero economic profits in the long-run. C. earn economic profits in the short-run but zero economic profits in the long-run. D. ea

Managerial economics

A competitive firm estimates its average variable cost function to be . AVC=125-.21Q+.0007Q^2(squared) The firm's total fixed cost is $3,500. a. The marginal cost function associated with this average variable cost function is SMC =__________________________. b. AVC reaches its minimum at ______ units of output. Minimum AVC

What is the profit maximizing output?

John is considering opening a shop to make desks. He estimates the cost information for the first-through-the-ninth desk (nine is his estimated maximum monthly output). The first desk costs $520 to produce, including $380 in overhead expenses. The price of the desk has been set at $199. The additional desk have the fol

Oligopoly Model

When one automaker begins offering low cost financing or rebates, others tend to do the same. What two oligopoly models might offer an explanation of this behavior? my answer: I think the two types of oligopoly models are the Game theory model and Kinked Demand Curve. Because we know their will always be a demand for cars, b

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

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

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

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