In 2016, Walmart closed 150 stores in the United States and deeply discounted the merchandise in them. Some people bought the merchandise at these low prices and resold it on Amazon, eBay, and other sites. An article in the Wall Street Journal described one reseller who: "sent three employees in a 26-foot truck to the nearest closing Walmart, about 160 miles south. They hauled off $35,000 in merchandise, like Legos and Star Wars pajamas, which he said he expects to sell for as much as $100,000 on Amazon." Source: Greg Bensinger, "Wal-Mart Closures Bring Out the Amazon Sellers," Wall Street Joumal, January 29, 2016. Is the reseller making a $65,000 profit on these goods? Briefly explain. O A. Yes, the seller is making a $65,000 profit because his revenue is $100,000 and his cost is $35,000. O B. No, the seller is making less than $65,000 because he incurs transactions costs. OC. Yes, the seller is actually earning a $100,000 profit because the $35,000 is a sunk cost. O D. No, the seller is making less than $65,000 because it is not possible to earn arbitrage profits in this market.

In 2016, Walmart closed 150 stores in the United States and deeply discounted the merchandise in them. Some people bought the merchandise at these low prices and resold it on Amazon, eBay, and other sites. An article in the Wall Street Journal described one reseller who: "sent three employees in a 26-foot truck to the nearest closing Walmart, about 160 miles south. They hauled off $35,000 in merchandise, like Legos and Star Wars pajamas, which he said he expects to sell for as much as $100,000 on Amazon." Source: Greg Bensinger, "Wal-Mart Closures Bring Out the Amazon Sellers," Wall Street Joumal, January 29, 2016. Is the reseller making a $65,000 profit on these goods? Briefly explain. O A. Yes, the seller is making a $65,000 profit because his revenue is $100,000 and his cost is $35,000. O B. No, the seller is making less than $65,000 because he incurs transactions costs. OC. Yes, the seller is actually earning a $100,000 profit because the $35,000 is a sunk cost. O D. No, the seller is making less than $65,000 because it is not possible to earn arbitrage profits in this market.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter4: Demand, Supply, And Market Equilibrium

Section: Chapter Questions

Problem 7P

See similar textbooks

Similar questions

Alex's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Alex produced eight fire engines, but he has decided to increase production to nine fire engines. The following graph shows the demand curve Alex faces. As you can see, to sell the additional engine, Alex must lower his price from $75,000 to $50,000 pe fire engine. Note that while Alex gains revenue from the additional engine he sells, he a loses revenue from the initial eight engines because he sells them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenu lost from the initial eight engines by selling at $50,000 rather than $75,000. Then use t green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $50,000. PRICE (Thousands of dollars per fire engine) 250 200 175 150 125 100 25 Alex 1 O True 3 S 7 QUANTITY (Fire engines) False Demand Revenue Lost Revenue…
Help
SUonsanh uaunsaau uMo Synopsis Your friend calls you and asks to borrow $20,000 so that he can open a Sushi restaurant in his hometown. In justifying this request, he argues that there must be significant demand for Sushi and other Asian food in his hometown because there are lots of such restaurants already there and three or four new ones are opening each month. He also argues that demand for Asian food will continue to increase and he points to the large number of firms that now sell frozen Asian dishes in grocery stores. Will you lend him money? What are the risks involved in choosing to lend him money? Instructions Please write 200-500 words of text. Using the external analysis tools (PESTLE analysis or Porter's five forces analysis), support your decision. Write your answer in a clear and organized paragraph. Your answer should include a clear and precise thesis that directly addresses the question.
Kevin's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Kevin produced eight fire engines, but he is considering increasing production to nine fire engines. The following graph shows the demand curve Kevin faces. As you can see, to sell the additional engine, Kevin must lower his price from $100,000 to $80,000 per fire engine. Note that although Kevin would gain revenue from the additional engine he sells, he would also lose revenue from the initial eight engines because he would have to sell them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial eight engines by selling at $80,000 rather than $100,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $80,000. 200 180 Revenue Lost 160 140 120 Revenue Gained Demand 100 80 60 40 20 3 4 5 6 QUANTITY (Fire engines) 7 9 10…
Ab 33 Economics
Tim True increase production from 4 to 5 fire engines because the True or False: If Tim's Fire Engines were a competitive firm instead and $105,000 were the market price for an engine, increasing its production would not affect the price at which he can sell engines. False dominates in this scenario.
Solve for the following
Not use Ai and chatgpt
Only typed answer
2
Omari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Omari initially produced eight trucks, but then decided to increase production to nine trucks. The following graph gives the demand curve faced by Omari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Omari must lower the price from $80,000 to $40,000 per truck. Notice that Omari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial eight engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial eight engines by selling at $40,000 rather than $80,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $40,000. PRICE (Thousands of dollars per fire engine) 220 200 180 160 140 120 100 80 60 40 20 0 Omari 0 1 + 2 3 4 5…
Ñ7