Long term and short term decisions.

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Answer 1

Question

Chapter 11, Problem 1SPA

To determine

Long term and short term decisions.

Expert Solution & Answer

Explanation of Solution

Laying off 44,000 retail workers in 2016 and scaling back premiere locations by the M’s store can be seen as a short run decision because only one factor of production, which is the labor is affected by the decision.

W store is shutting down its 629 stores and Amzn Company and other online retailers expanding can be seen as long run decisions as it affects all the factors of production. For instance, shutting down the retail stores implies a reduction in the size of all the factors of production say labor, capital and so on. Moreover, closing 15 percent department store without another job offer to closed store employees is also a long run decision as it affects all the factors of production.

Economics Concept Introduction

Short run: The short run refers to the time period, which does not allow a change in the capital to adjust to the market situation.

Long run: The long run refers to the time, which changes the production variable to adjust to the market situation.

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Ike’s Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company’s short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Number of Factories Average Total Cost (Dollars per bike) Q = 100 Q = 200 Q = 300 Q = 400 Q = 500 Q = 600 1 360 200 160 240 400 720 2 540 300 160 160 300 540 3 720 400 240 160 200 360 Suppose Ike’s Bikes is currently producing 500 bikes per month in its only factory. Its short-run average total cost is per bike. Suppose Ike’s Bikes is expecting to produce 500 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using . On the following graph, plot the three SRATC…

Ike’s Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company’s short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Number of Factories Average Total Cost (Dollars per bike) Q = 100 Q = 200 Q = 300 Q = 400 Q = 500 Q = 600 1 360 200 160 240 400 720 2 540 300 160 160 300 540 3 720 400 240 160 200 360 Suppose Ike’s Bikes is currently producing 600 bikes per month in its only factory. Its short-run average total cost is per bike. Suppose Ike’s Bikes is expecting to produce 600 bikes per month for several years. In this case, in the long run, it would choose to produce bikes usingone factory . On the following graph, plot…

Define the concept of short run and long run. Then use an example to illustrate the difference between short run and long run production operation

Answer 2

Question

Chapter 11, Problem 1SPA

To determine

Long term and short term decisions.

Expert Solution & Answer

Explanation of Solution

Laying off 44,000 retail workers in 2016 and scaling back premiere locations by the M’s store can be seen as a short run decision because only one factor of production, which is the labor is affected by the decision.

W store is shutting down its 629 stores and Amzn Company and other online retailers expanding can be seen as long run decisions as it affects all the factors of production. For instance, shutting down the retail stores implies a reduction in the size of all the factors of production say labor, capital and so on. Moreover, closing 15 percent department store without another job offer to closed store employees is also a long run decision as it affects all the factors of production.

Economics Concept Introduction

Short run: The short run refers to the time period, which does not allow a change in the capital to adjust to the market situation.

Long run: The long run refers to the time, which changes the production variable to adjust to the market situation.

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Answer 3

Question

Chapter 11, Problem 1SPA

To determine

Long term and short term decisions.

Expert Solution & Answer

Explanation of Solution

Laying off 44,000 retail workers in 2016 and scaling back premiere locations by the M’s store can be seen as a short run decision because only one factor of production, which is the labor is affected by the decision.

W store is shutting down its 629 stores and Amzn Company and other online retailers expanding can be seen as long run decisions as it affects all the factors of production. For instance, shutting down the retail stores implies a reduction in the size of all the factors of production say labor, capital and so on. Moreover, closing 15 percent department store without another job offer to closed store employees is also a long run decision as it affects all the factors of production.

Economics Concept Introduction

Short run: The short run refers to the time period, which does not allow a change in the capital to adjust to the market situation.

Long run: The long run refers to the time, which changes the production variable to adjust to the market situation.

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Answer 4

Question

Chapter 11, Problem 1SPA

To determine

Long term and short term decisions.

Expert Solution & Answer

Explanation of Solution

Laying off 44,000 retail workers in 2016 and scaling back premiere locations by the M’s store can be seen as a short run decision because only one factor of production, which is the labor is affected by the decision.

W store is shutting down its 629 stores and Amzn Company and other online retailers expanding can be seen as long run decisions as it affects all the factors of production. For instance, shutting down the retail stores implies a reduction in the size of all the factors of production say labor, capital and so on. Moreover, closing 15 percent department store without another job offer to closed store employees is also a long run decision as it affects all the factors of production.

Economics Concept Introduction

Short run: The short run refers to the time period, which does not allow a change in the capital to adjust to the market situation.

Long run: The long run refers to the time, which changes the production variable to adjust to the market situation.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 11, Problem 1SPA

To determine

Long term and short term decisions.

Expert Solution & Answer

Explanation of Solution

Laying off 44,000 retail workers in 2016 and scaling back premiere locations by the M’s store can be seen as a short run decision because only one factor of production, which is the labor is affected by the decision.

W store is shutting down its 629 stores and Amzn Company and other online retailers expanding can be seen as long run decisions as it affects all the factors of production. For instance, shutting down the retail stores implies a reduction in the size of all the factors of production say labor, capital and so on. Moreover, closing 15 percent department store without another job offer to closed store employees is also a long run decision as it affects all the factors of production.

Economics Concept Introduction

Short run: The short run refers to the time period, which does not allow a change in the capital to adjust to the market situation.

Long run: The long run refers to the time, which changes the production variable to adjust to the market situation.

Answer 6

Chapter 11, Problem 1SPA

To determine

Long term and short term decisions.

Expert Solution & Answer

Explanation of Solution

Laying off 44,000 retail workers in 2016 and scaling back premiere locations by the M’s store can be seen as a short run decision because only one factor of production, which is the labor is affected by the decision.

W store is shutting down its 629 stores and Amzn Company and other online retailers expanding can be seen as long run decisions as it affects all the factors of production. For instance, shutting down the retail stores implies a reduction in the size of all the factors of production say labor, capital and so on. Moreover, closing 15 percent department store without another job offer to closed store employees is also a long run decision as it affects all the factors of production.

Economics Concept Introduction

Short run: The short run refers to the time period, which does not allow a change in the capital to adjust to the market situation.

Long run: The long run refers to the time, which changes the production variable to adjust to the market situation.

Answer 7

Chapter 11, Problem 1SPA

To determine

Long term and short term decisions.

Answer 8

Expert Solution & Answer

Explanation of Solution

Laying off 44,000 retail workers in 2016 and scaling back premiere locations by the M’s store can be seen as a short run decision because only one factor of production, which is the labor is affected by the decision.

W store is shutting down its 629 stores and Amzn Company and other online retailers expanding can be seen as long run decisions as it affects all the factors of production. For instance, shutting down the retail stores implies a reduction in the size of all the factors of production say labor, capital and so on. Moreover, closing 15 percent department store without another job offer to closed store employees is also a long run decision as it affects all the factors of production.