Question
Your company, P&G, is a large brand management company that is one of top companies in the country. It is currently producing at a point
Your company, P&G, is a large brand management company that is one of top companies in the country. It is currently producing at a point on its long-run average cost curve with economies of scale.
An opportunity has risen where, as the owner, you can enter a long-term, fixed-price agreement or contract for your products. This would significantly increase the size of your firm. If you sign the contract and do not expect the prices of your inputs to change, would your profits be larger in the short run or the long run? Clearly give the reason for your answer.
Also need conclusion along with the answer
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