At a footwear company called Caboots, sales rose from $160,000 in 2000 to $2.3 million in 2006,

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At a footwear company called Caboots, sales rose from $160,000 in 2000 to $2.3 million in 2006, but in 2007 sales dipped to $1.5 million. Joey and Priscilla Sanchez, who run Caboots, blame the decline partly on a flood that damaged the firm’s office and sapped morale.
If the Sanchezes are correct in their assumptions and the prices of footwear didn’t change
a. Explain the effect of the flood on the total product curve and marginal product curve at Caboots.
b. Draw a graph to show the effect of the flood on the total product curve and marginal product curve at Caboots.
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Microeconomics

ISBN: 978-0133019940

11th edition

Authors: Michael Parkin

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