! Staples Closing Another 70 Stores as North American Sales SinkStaples closed 48 of its North American stores in 2016 and will close another 70 in 2017. Thefirm has expanded its e-commerce, and has focused on buying small business-to-businessservice providers beyond office supplies companies that employ 10 to 200 employees. It hasadded 1,000 people to its sales force. (Source: Fortume, March 9, 2017)a. Which of Staples' decisions described in the news clip is a short-run decision and which isa long-run decision?b. Why is Staples' long-run decision riskier than its short-run decision?c. Explain how Staples' short-run decision will change its average variable cost and its short-run ATC curve. Explain how Staples' long-run decision will change its total fixed cost and itsshort-run ATC curve.

Answered: Staples Closing Another 70 Stores as…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Staples Closing Another 70 Stores as North American Sales Sink
Staples closed 48 of its North American stores in 2016 and will close another 70 in 2017. The
firm has expanded its e-commerce, and has focused on buying small business-to-business
service providers beyond office supplies companies that employ 10 to 200 employees. It has
added 1,000 people to its sales force. (Source: Fortume, March 9, 2017)
a. Which of Staples' decisions described in the news clip is a short-run decision and which is
a long-run decision?
b. Why is Staples' long-run decision riskier than its short-run decision?
c. Explain how Staples' short-run decision will change its average variable cost and its short-
run ATC curve. Explain how Staples' long-run decision will change its total fixed cost and its
short-run ATC curve.

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The short run is a concept that states that at least one input is fixed while others are variable within a specific time period in the future. It expresses the idea in economics that an economy behaves differently depending on how long it has to react to certain stimuli. The conceptual time period in which at least one factor of production is fixed in amount while other factors are variable in amount is known as the short run. A long run is a period of time when a manufacturer or producer is able to be flexible in its production decisions.
A long period of time following the start of something in order to invest for the long term. In the long run, your solution may cause more problems.

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