Elasticities and Pricing Decisions Managerial Economics Christie Howell June 20, 2023

1. You are a manager at Glass, Inc. - a mirror and window supplier. Recently, you conducted a study of the production process for your single-side encapsulated window. The results from the study are summarized below and are based on the eight units of capital currently available at your plant. Workers are paid $60 per unit of labor, capital is rented at $20 per unit of capital. 1 cross-price elasticity of demand. - Explain the meaning of own price and cross-price elasticity of demand. - Discuss why it is important for a manager or owner to understand the two forms of elasticity. - Given the information above, calculate the following for each level of labor input for Glass, Inc. Show and explain your calculations. - average variable costs - average fixed cost - average total cost - marginal cost 2. You are a management consultant for a 30 year-old partner in a large law firm. In a meeting, your client says: "According to an article in The New York Times, 57 percent of large law firms have a mandatory retirement age for partners in the firm. Before they retire, partners are paid directly for the work that they do, and, as an owner, they are entitled to a share of the profits of the firm. Once they retire, partners do not receive either form of compensation. In light of this, I think we should eliminate mandatory retirement in order to gain a 'competitive advantage' in attracting high-quality lawyers to work for our firm. Of course, you are the expert." - Is mandatory retirement legal in your chosen profession or career path? If so, what is the justification for the law? Does your current employer have a mandatory retirement age? - Should the law firm eliminate mandatory retirement in order to gain a 'competitive advantage'? Describe and justify your recommendation. - Discuss your own personal and professional opinion about mandatory retirement, regardless of the industry. Prepare a 2-3 page report in APA style that summarizes your findings. Use at least two additional credible resources, and cite appropriately. Submit your report using the instructions below