MICROECONOMICS (LL)-W/ACCESS >CUSTOM<
11th Edition
ISBN: 9781264207718
Author: Colander
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 5QAP
To determine
Explain the floor shop participation and Walmart-like approach to cost saving.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Making dresses is a labor-intensive process. Indeed, the production function of a dressmaking firm is well described by the equation Q = L − L2/(23*100), where Q denotes the number of dresses per week and L is the number of labor hours per week. The firm’s additional cost of hiring an extra hour of labor is about $5 per hour (wage plus fringe benefits). The firm faces the fixed selling price, P = $40. How much labor should the firm employ? (Round your answer to the nearest whole number.)
Frame de Art is an art framing shop in a small town. Frame de Art has one storefront ($500 per week) and can hire workers for $300 per week per worker. The table below shows how output of framed art (in hundreds per week) varies with the number of workers. Calculate the marginal cost of 100 to 500 framing jobs for Frame de Art (assume labor to be the only variable cost).
Labor
(workers
per week)
Framed art
(hundreds
per week)
0
0
1
1
3
2
6
3
11
4
20
5
Making dresses is a labor-intensive process. Indeed, the production function of a dressmaking firm is well described by the equation Q = L − L2∕800, where Q denotes the number of dresses per week and L is the number of labor hours per week. The firm’s additional cost of hiring an extra hour of labor is about $20 per hour (wage plus fringe benefits). The firm faces the fixed selling price, P = $40.
Over the next two years, labor costs are expected to be unchanged, but dress prices are expected to increase to $50. What effect will this have on the firm’s optimal output?
A- Increase
B- Decrease
C- No Effect
Chapter 12 Solutions
MICROECONOMICS (LL)-W/ACCESS >CUSTOM<
Ch. 12.1 - Prob. 1QCh. 12.1 - Prob. 2QCh. 12.1 - Prob. 3QCh. 12.1 - Prob. 4QCh. 12.1 - Prob. 5QCh. 12.1 - Prob. 6QCh. 12.1 - Prob. 7QCh. 12.1 - Prob. 8QCh. 12.1 - Prob. 9QCh. 12.1 - Prob. 10Q
Ch. 12.A - Prob. 1QECh. 12.A - Prob. 2QECh. 12.A - Prob. 3QECh. 12.A - Prob. 4QECh. 12.A - Prob. 5QECh. 12.A - Prob. 6QECh. 12.A - Prob. 7QECh. 12 - Prob. 1QECh. 12 - Prob. 2QECh. 12 - Prob. 3QECh. 12 - Prob. 4QECh. 12 - Prob. 5QECh. 12 - Prob. 6QECh. 12 - Prob. 7QECh. 12 - Prob. 8QECh. 12 - Prob. 9QECh. 12 - Prob. 10QECh. 12 - Prob. 11QECh. 12 - Prob. 12QECh. 12 - Prob. 13QECh. 12 - Prob. 14QECh. 12 - Prob. 15QECh. 12 - Prob. 16QECh. 12 - Prob. 17QECh. 12 - Prob. 1QAPCh. 12 - Prob. 2QAPCh. 12 - Prob. 3QAPCh. 12 - Prob. 4QAPCh. 12 - Prob. 5QAPCh. 12 - Prob. 1IPCh. 12 - Prob. 2IPCh. 12 - Prob. 3IPCh. 12 - Prob. 4IPCh. 12 - Prob. 5IPCh. 12 - Prob. 6IP
Knowledge Booster
Similar questions
- Only solve part 2 . That is sub question (2)arrow_forwardExercise 2.7 (P&R, chap. 8, p. 326: Exercise12) A number of stores offer film developing as a service to their customers. Suppose that each store offering this service has a cost function C(q) = 50+ 0.5q +0.08q² and a marginal cost MC = 0.5 + 0.16q. a) If the going rate for developing a roll of film is €8.50, is the industry in long-run equilibrium? If not, find the price associated with long-run equilibrium. b) Suppose now that a new technology is developed which will reduce the cost of film developing by 25 percent. Assuming that the industry is in long-run equilibrium, how much would any one store be willing to pay to purchase this new technology?arrow_forwardPlease solve sub question (5) ONLYarrow_forward
- 3-5 Starbucks Starbucks is hoping to make use of its excess restaurant capacity in the evenings by experimenting with selling beer and wine. It speculates that the only additional costs are hiring more of the same sort of workers to cover the additional hours and costs of the new line of beverages. What hidden costs might emerge?arrow_forwardEconomists have a different way of talking about costs than accountants. According to economists, which of the following statements are true? In the long run, economies of scale are always present Monopoly is a very good market structure for consumers In the long run, a firm can change any sort of cost it faces O Monopsony is a very good market structure for sellersarrow_forwardECON 4333-001 (online) Spring 2020 Homework Assignment #2-Revised MR This question is based on the figure above, which describes cost and demand conditions in the widget industry. Assume that costs functions to not vary according to market structure (competition vs. monopoly, for example). Complete the following table. All variables should be expressed in dollars. (Hint: use the Cowling and Mueller method for measuring consumer surplus and deadweight) Market Structure Price Quantity Economic Profit Consumer Surplus Dead Weight Loss Competition 500 400 Monopoly The following table illustrates the distribution of retail grocery sales in the Asheville, NC market: Market Retailer Share (%) Kroger…arrow_forward
- In the competitive electrical motor industry, the workers at Galt Inc. threaten to go on strike. To avoid the strike, Galt Inc. agrees to pay its workers more. At all other factories, the wage remains the same. What does this do to the marginal cost curve at Galt Inc.? Does it rise, does it fall, or is there no change?arrow_forwardThe following costs were estimated from steel operations in the US and Japan by Peter Marcus in Comparative Circumstances of Major Steel Mills in the US, European Community, and Japan (1982). Numbers represent costs per ton of steel for labor, capital machinery, and material inputs: Which country spent more on labor input? What are two possible reasons? If it costs $100 per ton to ship steel to the US, find the cost of Japanese steel in the US if Japanese profit is zero. If Japanese producers make a 2% profit, find the price of Japanese steel in the US. Would US producers want to allow less than 2% profit for the Japanese producers? Where will US producers want the trigger price?arrow_forwardProducer Theory A firm has the following Production Function: Q=3K²L² and w=P₁= $10 r=Px=$90 a) If the profit maximizing firm is committed to producing output Q = 6300 units at least cost, what are the optimal amounts of capital and labour the firm should employ? b)what is the cost of prarrow_forward
- Starbucks is hoping to make use of its excess restaurant capacity in the evenings by experimenting with selling beer and wine. It speculates that the only additional costs are hiring more of the same sort of workers to cover the additional hours and costs of the new line of beverages. What hidden costs might emerge?arrow_forward2.4 Water is produced and sold by the government. Demand for water is represented by the linear function Q=50-2P. The total cost function for water production is also a linear function: TC(Q)= 100+ 100. You will also need to work out both the average cost of production, denoted by AC(Q), equal to the total cost of producing a quantity of output divided by that quantity of output, TC(Q)/Q, and the marginal cost of production, denoted by MC(Q), which is the additional cost incurred to produce one more unit. a. What fee should the government charge per unit of water in order to reach the efficient allocation? b. How much should it charge if it wishes to maximize profit from the sale of water? C. What is the value of the efficiency loss that results from charging the price in part b rather than the price determined in part a?arrow_forwardThe local newspaper has asked you (as a top economics student) to provide an industry analysis of hair stylists in Midtown. Here is what you've found so far: 1) There are 100 hair stylists in Midtown which all compete against one another for clients. 2) The market price for a hair styling is $20. 3) All firms in the market have a monthly overhead cost of $5,625 and a monthly variable cost that you've determined to be VC = $5q + $.01q2 The optimal amount of hair stylings given per month per firm is ___ and the monthly profits per firm are $___.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning