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Short- and Long-Run Cost Functions

Micoreconomics

You must post a memo which you explain the factors that contribute to the elasticity of goods. You must also incorporate a real-life example of price elasticity of demand, and discuss how it impacts the economy. * Discuss in detail the influences of price elasticity of demand. * Explain the factors that contribut

Short run / Long run

You are a manager in a perfectly competitive market. The price in your market is $35. Your total cost curve is C(Q)= 10+2Q+0.5Q2. a. What level of output should you produce in the short run? b. What price should you charge in the short run? c. Will you make any profits in the short run? d. What will happen in the long run?

Letter on Subsidizing to Attract

Mr. Smith, has fallen behind on his work, he has asked you to help prepare a letter for a local business/economic project. Your local city is trying to attract a new garbage processing facility in an underdeveloped part of town. As part of the package of incentives for luring the facility's builders, the city is offering an econ

Managerial Economics

Many economists argue that more research, development and innovation occur in the oligopolistic market structure than in any other. Why?

Demand

Suppose that the price elasticity of demand for cigarettes is 0.46 in the short run and 1.89 in the long run, the income elasticity of demand for cigarettes is 0.50, and the cross-price elasticity of demand between cigarettes and alcohol is -0.70. Suppose also that the price of cigarettes, the income of consumers, and the price

The demand curve

1. Illustrate the following demand on a graph: Price (per pair) $100 $80 $60 $40 $20 Quantity demanded (pairs per day) 10 14 18 22 26 (a) How many pairs will be demanded when the price is $70? (b) How much money will be spent on shoes at a price of (i) $50 (ii) $90 3. According to the News stori

Elasticity of Demand in short and long run

Suppose that the price elasticity of demand for cigarettes is 0.46 in the short-run and 1.89 in the long-run, the income elasticity of demand for cigarettes is 0.50, and the cross-price elasticity of demand between cigarettes and alcohol is -0.70. Suppose also that the price of cigarettes, the income of consumers, and the price

Explain why a firm in a perfectly competitive market would choose to remain in business, if its profit is zero at equilibrium. Illustrate any theories or concept you decide to use to answer this quest.

Explain why a firm in a perfectly competitive market would choose to remain in business, if its profit is zero at equilibrium. Illustrate any theories or concept you decide to use to answer this question with numerical examples. The analysis of zero profit conditions showed that firms might remain in business for a time des

total fixed cost structure

The El Dorado Star is the only newspaper in El Dorado, New Mexico. Certainly, the competes with The Wall Street Journal, USA Today, and The New York Times for national news reporting, but the Star offers readers stories of local interest, such as local news, weather, sporting events, and so on. The El Dorado Star faces the rev

Federal Reserve and the Sale of Bonds

If the Federal Reserve were to sell bonds, what would likely happen to the money supply and interest rates? Carefully Explain (the money market graph would help). Using the AS/AD model what do you predict will happen to the level of Real GDP and the Price level in the U.S. in the Short-Run and Long-Run? Carefully Explain (a g

Profit Maximization Short-Run Demand

A firm has the following short-run demand and cost schedule for a particular product: Q=100+2P and Total Cost (TC)=200+2Q. a. Determine the firm's profit-maximizing Quantity Q, Price P, and economic profits or losses. b. If this firm operates in a monopolistically competitive market, what will happen in the long-run to Q

traditional & new Keynesian theory

Both traditional & new Keynesian theory indicate that the short run aggregate supply is horizontal. a) in terms of their short run implications for the price level & real GDP, is there any difference between the two approaches? Same short run implications Different short run implications b)In the terms of the

Short-Run Average and Total Cost

True or False? Please explain your reasoning. a. The short-run average total cost can never be less than the long-run average total cost. b. The short-run average variable cost can never be less than the long-run average total cost. c. In the long run, choosing a higher level of fixed cost shifts the long-run average total

Economics questions

1. If nothing else changes, an increase in fixed cost will A.decrease the break-even quantity point B.increase the break-even quantity point C.will have no effect on the break-even point D.may either increase or decrease the break-even point 2. The degree of operating leverage can be defined as A.the change in profit for

Short Run/Long Run Cost

You read a story in the newspaper about the "economy of mass production". This means that a. total cost is less a larger levels of production b. long run average costs is less at larger levels of production c. marginal cost is less at larger levels of production d. fixed cost is less at larger levels of production

Short Run

In the short run, shouldn't one produce as long as fixed costs are being covered? I'm confused on this. WHich costs should you be concerned with for the short run? fixed, total, average variable, overhead, average fixed? there are so many.

Short Run

11. How long is the "short-run" time period in the economic analysis of the market? a. three months or one business quarter b. total time in which sellers already in the market respond to changes in demand and equilibrium price c. total amount of time it takes new sellers to enter the market d. total

Principles of Microeconomics

Suppose, after graduation, you take a job in a factory in Chile that produces faux leather shoes. One day, your boss comes in and says, "this factory isn't operating at a profit and so we can minimize our losses by closing up shop." Yikes! You didn't think you'd lose your job that quickly. Your boss continues talking and states

Long-Run Average-Cost Curve

As a kid, you recorded the costs of your Kool-Aid stand and drew your long-run average-cost curve. Now you work in a video chip factory. Would you expect any similarities IN SHAPE between the kool-aid cost curve and the long-run average cost curve for the chip factory? Would you expect any differences? Question requires specific

Short Run/Long Run

Suppose, after graduation, you take a job in a factory in Chile that produces faux leather shoes. One day, your boss comes in and says, "this factory isn't operating at a profit and so we can minimize our losses by closing up shop." Yikes! You didn't think you'd lose your job that quickly. Your boss continues talking and states

Short run fixed costs

Will a firm shut down in the short run if it is losing money, even though it can cover its fixed costs? Explain why this is true or false and include graph(s).

Microeconomics

A firm has the following short run demand and cost schedule for a particular product Q = 200 - 5P TC = 400 + 4Q a. At what price should this firm sell its product? b. If this is a monopolistically competitive firm, what do you think would start to happen in the long run? Explain c. Suppose in the long run, the dema

long term and short term costs

It has been said that, "In the long run, all costs are variable." If this is the case, how can production be studied by dividing costs into fixed and variable components? MBA

Price Discrimination

Some charge that third degree price discrimination is unfair or that it reduces social welfare. Why does charging one group a lower price hurt anyone? Please explain. b. McDonald's charges a higher price for a Big Mac in New York City than it does in a small town in Iowa. Is this an example of third degree price discrimin