Sleek Sneakers Co. is one of many firms in the marketfor shoes.a. Assume that Sleek is currently earning short-runeconomic profit. On a correctly labeled diagram,show Sleek’s profit-maximizing output and price,as well as the area representing profit.b. What happens to Sleek’s price, output, and profitin the long run? Explain this change in words, andshow it on a new diagram.c. Suppose that over time consumers become morefocused on stylistic differences among shoe brands.How would this change in attitudes affect eachfirm’s price elasticity of demand? In the long run,how will this change in demand affect Sleek’s price,output, and profit?d. At the profit-maximizing price you identified inpart (c), is Sleek’s demand curve elastic or inelastic?Explain

Question

Sleek Sneakers Co. is one of many firms in the market
for shoes.
a. Assume that Sleek is currently earning short-run
economic profit. On a correctly labeled diagram,
show Sleek’s profit-maximizing output and price,
as well as the area representing profit.
b. What happens to Sleek’s price, output, and profit
in the long run? Explain this change in words, and
show it on a new diagram.
c. Suppose that over time consumers become more
focused on stylistic differences among shoe brands.
How would this change in attitudes affect each
firm’s price elasticity of demand? In the long run,
how will this change in demand affect Sleek’s price,
output, and profit?
d. At the profit-maximizing price you identified in
part (c), is Sleek’s demand curve elastic or inelastic?
Explain

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Economics

Related Economics Q&A

Find answers to questions asked by students like you.

Q: Why did the rate at which different countries industrialized differ so greatly?  What were the human...

A: Answer - The rate of industrialized differ so greatly at different countries because of many factors...

Q: What are the implications of countries implementing policies of protecting domestic businesses from ...

A: Click to see the answer

Q: The following graph shows the output for Pat, a profit-maximizing corn farmer.   1. Suppose the corn...

A: A firm’s short run supply function is the increasing part of its short run marginal cost curve above...

Q: Suppose a per unit tax is imposed on monopolists a.) How does this affect output price? b.) how are ...

A: The monopoly is a market structure which is characterized by the presence of a single seller selling...

Q: Briefly explain what effect and why, a slowdown in Technological progress would have on the Aggregat...

A: A slow down in technological progress would affect the aggregate supply as it is directly related to...

Q: The production planner for Fine Coffees, Inc. produces two coffee blends: American (A) and British (...

A: It is given that the firm produces two different varieties of coffee which includes the A and B. bot...

Q: Which of the following would shift the long-run aggregate supply curve to the right?a. a decrease in...

A: The long-run aggregate supply curve represents the total amount of goods and services supplied in an...

Q: Suppose the California legislature passed a sweeping law to lower the number of regulations for buil...

A: In this case sweeping law will empowers California government to make necessary law and give proper ...

Q: Consider the information in the table below:   Nominal GDP GDP Deflator Real GDP   Popul...

A: The following formulae is used to calculate the missing values in the table:Nominal GDP = (Real GDP ...

Q: Number 3

A: The prisoner’s dilemma is the game between two persons that illustrate why cooperative behaviour is ...

Q: hey i was doing my homework and i couldnt figure out the last question

A: Average total cost is the per unit cost incurred in producing a commodity.

Q: Suppose the town of Boone has a total population of 50,000 people. Of those, 45,000 people are emplo...

A: Total Population = 50000 peopleEmployed = 45000 peopleStudents = 1000 peopleTherefore, people who ar...

Q: Suppose that in a closed economy GDP is equal to 11,000, taxes are equal to 1,500, consumption equal...

A: The closed economy is the type of economy in which there are no trade relations exists with the othe...

Q: Use the model of aggregate demand and short-run aggregate supply to explain how each of the followin...

A: Click to see the answer

Q: Question: Suppose the firm's only variable input is labor. Using the table, what level of output cor...

A: The information related to cost structure is provided in the table.

Q: What implications does the nature of the supply of agricultural products have for own-price elastici...

A: Supply: It refers to the quantity of a commodity that producer is willing and able to supply at give...

Q: Draw tfc, tvc, tc and marginal cost curve on the same graph.

A: To draw the graph of TC, TVC, TFC and MC random data have been taken.

Q: Suppose the world price of steel falls substantially. The demand for labor among steel-producing fir...

A: It is given that there is a fall in the world price of steel which will cause the steel-producing fi...

Q: One of the assumptions of classical theory of international trade is constant returns to scale but m...

A: Answer- One of the assumption of classical theory of international trade is constant to scale but mo...

Q: How has monetary policy been used and how was it effective during the last few decades?

A: Monetary policy is the tool used by the federal government which affect the money supply of the econ...

Q: how do i exlpain this and im i doing a graph?

A: To show the effect of a decline in wealth in the short-run and the long-run using the aggregate dema...

Q: 3. Activists and nonactivists both believe that Group of answer choices -the self-corrective mechan...

A: Activists and nonactivists both believe that: Macro-policy should seek to minimize economic fluctuat...

Q: Suppose the world price of steel falls substantially. The demand for labor among steel-producing fir...

A: Click to see the answer

Q: How has monetary policy been used and how was it effective during the Great Depression?

A: In order to control inflation and unemployment rates the Federal Reserve incorporates a policy which...

Q: A manufacturer of scrapbook kits has a fixed cost of $30,000. This manufacturer expects to sell 6,00...

A: Assume the cost of each scrapbook be “C” and the price of each scrapbook be “P”. Therefore, markup i...

Q: Suppose the long-run average total cost is strictly downward sloping. Would it be efficient to build...

A: Long run ATC is declining as shown in the diagram. Also, MC is 0 which shows that if a second bridge...

Q: b.Explain the Short Run Aggregate Supply curve and the assumptions that support its shape. List the ...

A: Click to see the answer

Q: Give a solution to fix a serious national recession

A: The recession is a situation of declining the Gross Domestic Product of the economy due to the decli...

Q: CENGAGE MINDTAP Assignment 8 (Ch 14) 1 + 0 0 1 2 3 4 5 6 7 8 9 10 QUANTITY (Millions of small boxes)...

A: As the equilibrium price is given to be $5, so we take $5 price for each unit.Total Revenue = Price ...

Q: d) and e)

A: (d) Consumer price index (CPI) measures the change in the price for a particular basket of good and ...

Q: 6. The variables in the index of leading indicators are included in the index because Group of answe...

A: The reason for including variables of leading indicators in the index is the tendency to predict tur...

Q: The use of "green" pesticide production practices while environmentally desirable, raises the margin...

A: Demand: It refers to the quantity of a commodity that consumer is willing and able to purchase at gi...

Q: What is inflation tax?

A: Inflation Tax – The inflation tax is the financial loss of value suffered by holders and fixed incom...

Q: (dollas мс . F 40 E ATC 30 AVC 22 в 20 ED0 350 Output (unit) 425 450 0 rri

A: The total fixed cost is the cost that remain constant in total dollar amount irrespective tio the ch...

Q: "A" is the correct answer, but I wondered what's wrong with "C" Thank you.

A: Answer - An increase in the supply of a good will decrease the total revenue producers receive ifNow...

Q: c.Explain in detail, 4 possible causes of change in the direction of the business cycle. You are loo...

A: The business cycle refers to changes in Gross Domestic Product (GDP) that is upward or downward move...

Q: List and explain thoroughly, 4 examples of significant economic costs of unemployment and what we mi...

A: The economic cost of unemployment are as follows:Cost to an individual: The unemployed people suffer...

Q: One supply-side measure introduced by the Reagan administration was a cut in income tax rates. Use a...

A: Due to decrease in tax rates, purchasing capacity increases and resource owners can hire more labor ...

Q: The federal minimum wage in 1991 was $4.25.  The value of the CPI in 1991 was 136.2  The value of th...

A: The table shows the CPI and minimum wage in1991 and 2018:

Q: For a given real interest rate, a decrease in the inflation rate would   a. increase the after...

A: We know,Real interest rate = Nominal interest rate – inflation rateTherefore, a decrease in inflatio...

Q: Over the past 20 years , Mexico has had high inflation and Japan has had low inflation.What do you p...

A: Inflation:Inflation refers to the rise in the general price level of goods and services in an econom...

Q: When are larger deficits desirable?

A: Deficit occurs when the government’s expenditure is greater than its revenue.

Q: 1. The table below presents hypothetical OLS results with used small SUV price information (in dolla...

A: (a) The predictive equation for the price of small used SUVs areP = 10,000 + 1000*(GN) +500*(GRN) + ...

Q: 1. Draw how the burden of the tax is distributed under the following scenarios: a) Inelastic demand ...

A: a) Inelastic demand and elastic supply:In this case, the initial equilibrium is at e at price P and ...

Q: Ellen is downloading labor market data for the most recent month, but her connection is slow. So far...

A: Total working age population constitutes people in participation rate and people not in labor force....

Q: how do i explain this

A: Before the change in the wealth of the people in the economy, the economy is in its long run equilib...

Q: Please help me finish this question I'm very confused!!! I attached a photo of the question.

A: Total cost of production for a firm is the sum of total fixed cost and total variable cost.TC = TFC ...