When new entrants to a competitive market have higher costs than existing firms, market price must be rising None of these answers are correct. sunk costs become an important determinant of short-run entrance strategy O accounting profits will be the primary signal for entrance
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- Can you answer me as soon as possible , urgentttttt!!!!!!!!!!! Bodyguard Ltd. was established in Hong Kong in 2020. It produces surgical masks sold to retailers, like personal cares stores, in Hong Kong. With its unique Chinese pattern printed on the masks, it also sells good in North America and Canada since 2021. Bodyguard adopts standardized marketing strategy worldwide. Recently, Bodyguard would enter into a contract with a vendor in Vietnam to expand its production capacity. However, Bodyguard’s managers have heard reports that the vendor operates factories with sweatshop conditions, which is not acceptable in Hong Kong. Employment in sweatshops provides a source of income for women in Vietnam, who can earn more wages than in many other jobs, which bring them food, nutrition and education for their children. Sweatshop is a preferred working place of Vietnamese. (c) Explain the TWO approaches in handling ethical dilemma – relativism and normativism. What would be the ethical…Line A in the figure below shows the total revenue for a perfectly competitive firm. It is a straight line (not a curve) because:a. The firm is a price takerb. The firm faces constant returns to scalec. The firm wants to maximise its profitsd. The firm has imperfect informationFor each of the above alternatives, argue whether they are true, false or uncertain.You are the vice president of a firm. After some analysis, you have determined that increasing the salaries of your workers by 10% will likely help increase your firm's profits. As a result of this finding, you meet with your firm's CEO and urge them to implement this 10% pay raise. a) Describe two arguments in favour of this 10% pay raise that centers on its potential to improve worker productivity. b) Describe two arguments in favour of this 10% pay raise that centers on its potential to lower your firm’s total costs.
- In a perfect competition with 100 identical firms, short-run market supply function of qS=150P+30 and market demand for these firm’s products is Q = 8000 – 200P, the short-run equilibrium market price is 0.33. True or false. Show solution.You are the manager of a firm that sells a “commodity” in a market that resembles perfect competition, and your cost function is C(Q) = 2Q + 3Q2. Unfortunately, due to production lags, you must make your output decision prior to knowing for certain the price that will prevail in the market. You believe that there is a 70 percent chance the market price will be $200 and a 30 percent chance it will be $600.a. Calculate the expected market price.$ b. What ouptut should you produce in order to maximize expected profits?unitsc. What are your expected profits?$Problem #2 Consider an industry in the U.S. facing aggregate (inverse) demand function: p(y) = 1050 – 5y The industry is currently in long run equilibrium. The market price is $225 and there are n = 11 firms producing. Each firm’s variable cost is: cv(y) = y3 What is each firm’s fixed cost?
- A price-taking firm in a competitive industry of a good that is continuously divisible (like sand) has a total cost function TC(Q) = 3.5Q^2 + 100Q + 500. The market price for the good is p = $240. a: Carefully write out this firm’s profit maximization problem, using the particulars of thisproblem. b: Give the marginal condition (equation) that characterizes the solution to this problem. Solvethis condition for the firm’s optimal quantity Q*. c: Calculate the firm’s maximized profit. d: On a graph with quantity on the horizontal axis, neatly plot the marginal revenue curve andmarginal cost curve. Show Q* on your graph. e: Label areas on your graph using a, b, c, etc. and indicate the areas that correspond to totalrevenue and variable cost.As CEO of firm A, you and your management team face the decision ofwhether to undertake a $200 million R&D effort to create a new megamedicine.Your research scientists estimate that there is a 40 percentchance of successfully creating the drug. Success means securing aworldwide patent worth $550 million (implying a net profit of $350million). However, firm B (your main rival) has just announced that it isspending $150 million to pursue development of the same medicine (bya scientific method completely independent of yours). You judge that B’schance of success is 30 percent. Furthermore, if both firms aresuccessful, they will split equally the available worldwide profits($275 million each) based on separate patents.a. Given its vast financial resources, firm A is risk neutral. Should firm Aundertake the $200 million R&D effort? (Use a decision tree to justifyyour answer.)b. Now suppose that it is feasible for firm A to delay its R&D decisionuntil after the result of B’s…(Please attempt thus question if you will provide Solution for both questions below...thanks) 1) If a firm wanted to reduce the annual EOQ cost as a percentage of the annual purchase cost by 50 percent, how would the demand rate have to change? A) Decrease by 50 percent. B) Remain unchanged. C) Increase by 50 percent. D) Double. E) Quadruple. Select correct option and explain answer with Calculation. 2) A firm evaluates its EOQ quantity to equal 180 cases, but it chooses an order quantity of 200 cases. Relative to the order quantity of 180 cases, the order quantity of 200 cases has A) higher ordering cost and higher holding cost. B) higher ordering cost and lower holding cost. C) lower ordering cost and higher holding cost D) lower ordering cost and lower holding cost.
- If a company with market pewer is not making enongh profit (in equilibrinm), a. the price will drop, thus increasing total revenue because demand is elastic. b. price will increase thins increasing total income because demand is inelastic. c. it will exit the industry in the long run if the economic benefit is negative. d. it will expand sales until they reach the unit elastic point on demand. Market power a. it is the ability to increase the price without losing all sales. b. it exists whenever the firm faces a downward sloping demand curve. c. the greater the less elastic is the demand. d. the smaller, the more positive is the cross elasticity of demand. e All of the Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.The total revenue curve of a firm is R(q) = 40q − 12q2 and its average cost A(q) =1/30 q2 − 12.85q + 20 + 400/q, where q is the firm's output. i. Is the rate of change of profit increasing or decreasing when theouput level of the firm is 10 units?ii. Determine the level of output for which the firmᇱs profit is maximized.iii. What is the firm's maximum profit?Managers of perfectly competitive firms must be cautious when deciding to permanently expand (or contract) the scale of production. What factors should go into the decision to expand the scale of production if the market price of your product increases? (select all that apply) A. Whether your product has a complement in consumption B. If the scale expansion is appropriate and not in excess C. If other firms are likely to enter the market D. Whether the price change is temporary or permanent