Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
expand_more
expand_more
format_list_bulleted
Question
Chapter P3, Problem 5KC
To determine
The long run supply curve of the increasing cost industry.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Title Case: Ford to Shutdown Australian Production by 2016
The Ford Motor Company has decided to wind down production in Australia after 85 years. The carmaker says the closure of two plants and the loss of 1,200 jobs are because of production losses and the small market. “Manufacturing is not viable for Ford in Australia for the longer term,” said Chief Executive of Ford Australia Bob Graziano. “Our locally made products continue to be unprofitable, while our imported products continue to be profitable.” Analysts estimate the company has approximately $580 million in losses in the last fiscal year, and profit fell by 72 percent. Ford’s decision in Australia follows effort to also close shop in Europe. Graziano told reporters, Australian production was no longer sustainable as it was double the costs of Europe and quadruple the costs in Asia. The average hourly manufacturing salary in Australia in 2011 was $46.29, slightly lower than in Germany but 30 percent higher than the US and…
Title Case: Ford to Shutdown Australian Production by 2016
The Ford Motor Company has decided to wind down production in Australia after 85 years. The carmaker says the closure of two plants and the loss of 1,200 jobs are because of production losses and the small market. “Manufacturing is not viable for Ford in Australia for the longer term,” said Chief Executive of Ford Australia Bob Graziano. “Our locally made products continue to be unprofitable, while our imported products continue to be profitable.” Analysts estimate the company has approximately $580 million in losses in the last fiscal year, and profit fell by 72 percent. Ford’s decision in Australia follows effort to also close shop in Europe. Graziano told reporters, Australian production was no longer sustainable as it was double the costs of Europe and quadruple the costs in Asia. The average hourly manufacturing salary in Australia in 2011 was $46.29, slightly lower than in Germany but 30 percent higher than the US and…
Title Case: Ford to Shutdown Australian Production by 2016
The Ford Motor Company has decided to wind down production in Australia after 85 years. The carmaker says the closure of two plants and the loss of 1,200 jobs are because of production losses and the small market. “Manufacturing is not viable for Ford in Australia for the longer term,” said Chief Executive of Ford Australia Bob Graziano. “Our locally made products continue to be unprofitable, while our imported products continue to be profitable.” Analysts estimate the company has approximately $580 million in losses in the last fiscal year, and profit fell by 72 percent. Ford’s decision in Australia follows effort to also close shop in Europe. Graziano told reporters, Australian production was no longer sustainable as it was double the costs of Europe and quadruple the costs in Asia. The average hourly manufacturing salary in Australia in 2011 was $46.29, slightly lower than in Germany but 30 percent higher than the US and…
Knowledge Booster
Similar questions
- Dere T:n? (Key Question) Assume the following cost data are for a purely competitive producer: 21-4 Average variable Average total Average fixed Marginal cost Total Product cost cost cost $45 40 $105.00 72.50 60.00 52.50 49.00 47.50 $45.00 42.50 40.00 $60.00 30.00 20.00 15.00 12.00 10.00 35 30 37.50 37.00 37.50 38.57 40.63 43.33 46.50 35 40 45 6. 47.14 55 8.57 48.13 50.00 52.50 65 7.50 6.67 75 10 6.00 a. At a product price of $56, will this firm produce in the short run? Why or why not? If it is preferable to produce, what will be the profit-maximízing or loss-minimizing output? Explain. What economic profit or loss will the firm realize per unit of output? b. Answer the relevant questions of 4a assuming product price is $41. c. Answer the relevant questions of 4a assuming product price is $32. d. In the table below, complete the short-run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3). (4) Quantity supplied, 1500 firms…arrow_forwardTitle: Profit-maximizing behavior in perfectly competitive factor markets The value of a firm’s marginal product of labor (VMPL)(VMPL)left parenthesis, V, M, P, L, right parenthesis equals the marginal revenue product of labor (MRP_L)(MRPL)left parenthesis, M, R, P, start subscript, L, end subscript, right parenthesis. What kind of market does this firm sell its product in? Choose 1 answer: A. a monopoly market B an oligopoly market C. a monopsony market D a perfectly competitive market E a monopolistically competitive marketarrow_forwardM/c question - Micro 19) Refer to Figure 14-3. When the price is P2 and the firm maximizes its profit or minimizes its losses, what will occur at the firm? A. It will experience a loss but continue to operate. B. It will experience a zero profit. C. It will experience a positive profit. D. It will shut down 18) Refer to Figure 13-7. When does the firm experience economies of scale? A. if it changes its level of output from Q1 to Q2 B. if it changes its level of output from Q3 to Q4 C. if it changes its level of output from Q4 to Q5 D. if it changes its level of output from Q2 to Q3arrow_forward
- 1. Which of the following statements are correct? (i) When average variable cost is rising, marginal cost must be greater than average variable cost. (ii) When marginal cost is rising, average total cost must be rising. (iii) When marginal cost is rising, average fixed cost could be rising or falling. (iv) A competitive firm will produce at the minimum effect scale in the long-run equilibrium. (A) (i), (ii) (B) (i), (iii) (C) (i),(iv) (D) (i), (iii), (iv)arrow_forwardMultiple choice - microeconomics 45) Refer to Figure 13-2. What does the changing slope of the total-cost curve reflect? A. decreasing marginal cost B. decreasing marginal product C. decreasing average variable cost D. decreasing average total cost 44) What distinguishes short-run cost analysis from long-run cost analysis for a profit-maximizing firm? A. In the short run the size of the factory is fixed B. In the short run there are no fixed costs C. In the short run the number of workers used to produce the firm’s product is fixed. D. In the short run output is not variable.arrow_forwardtopic : Industry equilibrium Question : What determines the number of firms in an industry (a) in the short run, (b) in the long run.arrow_forward
- Business Name: Industry: Market structure (4 market structure one company each): Market Condition: Price competition: Conclusion (choose what market structure applicable to you): Give 4 businesses and identify the industry they are in, market structure, market condition, price competition and conclusion.arrow_forwardI. (9) Case Study: Widget Industry In 2007, the widget industry was perfectly competitive. The lowest point on the long run average cost curve of each of the identical widget producers is $ 4, and this minimum point occurs at an output of 2,000 widgets per month. When the optimal scale of a firm's plant is operated to produce 2,600 widgets per month, the short run average cost of each firm is $ 10. The market (or industry ) demand curve for widgets is Qd = 280,000 - 20,000 P Where P is the price of a widget and Qd is the quantity of widgets demanded per month. The market supply curve for widgets is Qs = 160,000 + 10,000 P where Qs is the quantity of widgets supplied per month (P is expressed in dollars per widget) a) What do you understand about a market structure being perfectly competitive? b) What is the equilibrium price of a widget? Is this the long run equilibrium price? c) How many firms are in this industry when it is in long run equilibrium? d) If the market demand curve…arrow_forwardQuestion 4. (a) Explain the concept of economies of scale. Explain how an organisation such as Starbucks would realise economies of scale in its business operations (use examples to support your answer)(b) Wages are lower in the Middle East than in Australia. Explain how this fact will make Starbucks average cost and marginal cost curves different in its Middle East cafés compared to its Australian cafesarrow_forward
- Multiple choice - microeconomics 41) Where is the competitive firm’s short-run supply curve located? A. the part of the average-variable-cost curve that lies above marginal cost B. the part of the marginal-cost curve that lies above average variable cost C. the part of the average-total-cost curve that lies above marginal cost D. the part of the marginal-cost curve that lies above average total cost 40) For any given price, a firm in a competitive market will maximize profit by selecting the level of output where price intersects which curve? A. marginal-revenue curve B. average-variable-cost curve C. marginal-cost curve D. average-total-cost curvearrow_forwardHello, can I get help with the last three parts of this question?arrow_forward(10) In long-run equilibrium in a perfectly competitive market, which of the following is true? (a) Average cost equals marginal cost (b)Profit = 0 (C)Price equals marginal cost (d)all of the abovearrow_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
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning