Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 14, Problem 8SPPA
To determine
Why Gap is closing its stores. Is it a long run decision or short run decision? Is it taking benefit of economies of scale?
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10. Read this excerpt from the October 18, 2022, Wall Street Journal.
KINDERHOOK, N.Y.—Golden Harvest Farms has grown from a small apple-growing operation when Doug Grout’s grandfather opened it after World War II, to a multipronged business that includes a retail stand, cider press, distillery, tasting room and barbecue restaurant.
But Mr. Grout said he sees a cloudier future for the business due to new state regulations that will require him to increasingly pay more overtime to the farmworkers who pick his apples in the coming years, raising one of his primary costs.
“We were looking to buy another orchard, and that whole thing is tabled,” said Mr. Grout, 52 years old, who co-owns Golden Harvest with his father, as he drove between rows of Honeycrisp trees. “We’re stepping away. You’re going to see farms go out of business. This is very shortsighted.”
For the apple market in New York, the new regulations will:
Cause supply to shift to the left, leading to higher prices and a…
Plant sizes get larger as you move from Plant 1 to Plant 4. In the long run, the firm should use Plant 3’s size for what level of output?
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Foundations of Economics (8th Edition)
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