FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose the industry cost curve given below. Current market demand is 65 units. Your firm owns production facilities C and F. a. What is your

Suppose the industry cost curve given below. Current market demand is 65 units. Your firm

owns production facilities C and F.

a. What is your current profit? Show your work/justify .

b. Which action would be more profitable for your firm: (i) increasing facility C capacity by

50% or (ii) mothballing (shutting down) facility F? Show your work/justify. Assume the

two actions cost the same.

image text in transcribed
9".\" Suppose the industry cost curve given below. Current market demand is 65 units. Your firm owns production facilities C and F. What is your current profit? Show your work/justify . Which action would be more protable for your firm: (i) increasing facility C capacity by 50% or (ii) mothballing (shutting down) facility F? Show your work/justify. Assume the two actions cost the same. Average Cost (AC) 20 30 40 50 60 70 8 Total Industry Capacity 30 25 15 13 10 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Marketing

Marketing

Authors: Shane Hunt

3rd Edition

1260800458, 9781260800456

More Books

Students also viewed these Economics questions

Question

★★★★★
On each December 31, you plan to deposit $2,000 in a savings account. The account will earn 9 percent annual interest, which will be added to the fund balance at year-end. The first deposit will be...

Answered: 1 week ago

Question

★★★★★
Need now please! Lotus Inc. purchased equipment on January 1, 2018, at a cost of $95,000. It sold the equipment on January 1, 2021, when accumulated depreciation was $51,000. The sale price of the...

Answered: 1 week ago

Question

★★★★★
I am waiting for two friends to arrive at my house. The time until A arrives is exponentially distributed with rate a, and the time until B arrives is exponentially distributed with rate b. Once they...

Answered: 1 week ago

Question

★★★★★
D. J. Harris checkbook lists the following: The January bank statement shows Requirement Prepare Harris bank reconciliation at January31. Date Check No. Item Check Deposit Balance $ 530 515 630 585...

Answered: 1 week ago

Question

★★★★★
why do you think consistency is so important between the loan estimate and the closing disclosure?

Answered: 1 week ago

Question

★★★★★
What page numbers displays for france in the index is updated

Answered: 1 week ago

Question

★★★★★
QUESTION 7 Graph 10-3 P Social Cost P Supply (Private Cost) P Demand Q1 Q This graph reflects the market for kiwifruit, where pesticide used by kiwifruit orchardists also unintentionally kills honey...

Answered: 1 week ago

Question

★★★★★
Sky Castle Manufacturing Company has two service departments, human resources and office services. It also has two production departments, assembly and finishing. The following information is made...

Answered: 1 week ago

Question

★★★★★
1. Do you think that a company should primarily be valued relative to the global industry to which it belongs, or to other national companies listed in its domestic home market? 2. Describe indexes...

Answered: 1 week ago

Question

★★★★★
Coffee-cup Corporation received an invoice on May 2, 2012, stating the discount terms as 2/10, n/30. The company settled the invoice amount by paying $1,470 on May 10, 2012. What is the amount of...

Answered: 1 week ago

Question

★★★★★
1.Mr. John Foret is 42 years old and divorced from his wife. His Net Income For Tax Purposes consists of rental income. He has retained the family home and both of the children of the marriage live...

Answered: 1 week ago

Question

★★★★★
Pixel Ltd. is a retailer operating in Baliwag, Bulacan. Pixel uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory; the inventory is...

Answered: 1 week ago

Question

★★★★★
4. What is meant by the statement: We are extremely limited in our willingness to allow others to put their own case in a social situation?.

Answered: 1 week ago

Question

★★★★★
8. Give three examples of how the level of confidence one has in someone can affect a communication situation.

Answered: 1 week ago

Question

★★★★★
7. List examples from a communication situation with a foreign person in which you have used the sauna manoeuvre (described in this chapter), and examples where you have been subjected to the...

Answered: 1 week ago

Previous Question Next Question