Suppose that it costs $5 to produce a low-quality electric stapler and $30 to produce a high-quality stapler. Consumers cannot distinguish between good staplers and poor staplers when they make heir purchases. There are four firms producing staplers. Consumers value staplers at their cost of production and are risk neutral. Will any of the four firms be able to produce high quality staplers vithout making losses? Suppose each firm produces 50 staplers. f one firm makes high-quality staplers, then each firm that produces low-quality staplers will earn profit of $ as whole numbers and include a minus sign if necessary.) A firm and the firm that makes the high-quality staplers will earn $ have an incentive to produce high-quality staplers. Now assume consumers are willing to pay $68 for high-quality staplers. f one firm makes high-quality staplers, then each firm that produces low-quality staplers will earn profit of $ and the firm that makes the high-quality staplers will earn $. (Enter your responses as whole numbers and include a minus sign if necessary.) have an incentive to produce high-quality staplers. A firm (Enter your responses

Suppose that it costs $5 to produce a low-quality electric stapler and $30 to produce a high-quality stapler. Consumers cannot distinguish between good staplers and poor staplers when they make heir purchases. There are four firms producing staplers. Consumers value staplers at their cost of production and are risk neutral. Will any of the four firms be able to produce high quality staplers vithout making losses? Suppose each firm produces 50 staplers. f one firm makes high-quality staplers, then each firm that produces low-quality staplers will earn profit of $ as whole numbers and include a minus sign if necessary.) A firm and the firm that makes the high-quality staplers will earn $ have an incentive to produce high-quality staplers. Now assume consumers are willing to pay $68 for high-quality staplers. f one firm makes high-quality staplers, then each firm that produces low-quality staplers will earn profit of $ and the firm that makes the high-quality staplers will earn $. (Enter your responses as whole numbers and include a minus sign if necessary.) have an incentive to produce high-quality staplers. A firm (Enter your responses

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Productive and Allocative Efficiency Analysis

Productive efficiency, also referred to as production efficiency is a term in economics describing the level at which a company is operating at its maximum capacity. Beyond this point, the entity will be unable to manufacture any additional goods without cutting down another product’s production level. This occurrence is an outcome of production happening alongside a Production Possibility Frontier (PPF).

Question

Suppose that it costs $5 to produce a low-quality electric stapler and $30 to produce a high-quality stapler. Consumers cannot distinguish between good staplers and poor staplers when they make
their purchases. There are four firms producing staplers. Consumers value staplers at their cost of production and are risk neutral. Will any of the four firms be able to produce high quality staplers
without making losses? Suppose each firm produces 50 staplers.
If one firm makes high-quality staplers, then each firm that produces low-quality staplers will earn profit of $ and the firm that makes the high-quality staplers will earn $. (Enter your responses
as whole numbers and include a minus sign if necessary.)
▼have an incentive to produce high-quality staplers.
Now assume consumers are willing to pay $68 for high-quality staplers.
If one firm makes high-quality staplers, then each firm that produces low-quality staplers will earn profit of $ and the firm that makes the high-quality staplers will earn $. (Enter your responses
as whole numbers and include a minus sign if necessary.)
A firm
have an incentive to produce high-quality staplers.
A firm

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