Economics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (7th Edition)
7th Edition
ISBN: 9780134833392
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 14, Problem 14.1.9PA
To determine
Impact of diseconomies of scale in quantity of output.
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Students have asked these similar questions
Kelsey produces microwaves. Last year, she made 10,000 microwaves at an average cost of $4 per microwave. Lamar produces toasters, and last year he made 4,000 toasters at an average cost of $11 per toaster. They are thinking about merging their companies, to see if they could produce output at a lower cost.
(a) Suppose their engineers gave them an estimate that if they wanted to form one big company and keep making 10,000 microwaves and 4,000 toasters, it would cost at total of $75,000 to produce that output. What would our measure of this firm's economy of scope (SC) be? Should they merge companies?
(b) Suppose instead their engineers had suggested that it would cost $90,000. What would our economies of scope be in that case? Should they merge companies?
Briefly explain what it means for a firm to have cost advantage over its competitors, and what are the economic conditions conducive to it. How can cost advantage be used as a barrier to entry?
3) As the owner of a new fast-food enterprise seeking a loan from a bank to finance the construction and operation of three new store locations, you have been asked to provide the loan officer with a brief analysis of the competitive environment in fast food restaurants. Draw a five forces diagram for the fast-food industry and briefly discuss the nature and strength of each of the five competitive forces.
Chapter 14 Solutions
Economics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (7th Edition)
Ch. 14 - Prob. 14.1.1RQCh. 14 - Prob. 14.1.2RQCh. 14 - Prob. 14.1.3RQCh. 14 - Prob. 14.1.4PACh. 14 - Prob. 14.1.5PACh. 14 - Prob. 14.1.6PACh. 14 - Prob. 14.1.7PACh. 14 - Prob. 14.1.8PACh. 14 - Prob. 14.1.9PACh. 14 - Prob. 14.1.10PA
Ch. 14 - Prob. 14.2.1RQCh. 14 - Prob. 14.2.2RQCh. 14 - Prob. 14.2.3RQCh. 14 - Prob. 14.2.4RQCh. 14 - Prob. 14.2.5PACh. 14 - Prob. 14.2.6PACh. 14 - Prob. 14.2.7PACh. 14 - Prob. 14.2.8PACh. 14 - Prob. 14.2.9PACh. 14 - Prob. 14.2.10PACh. 14 - Prob. 14.2.11PACh. 14 - Prob. 14.2.12PACh. 14 - Prob. 14.2.13PACh. 14 - Prob. 14.2.14PACh. 14 - Prob. 14.2.15PACh. 14 - Prob. 14.2.16PACh. 14 - Prob. 14.2.17PACh. 14 - Prob. 14.2.18PACh. 14 - Prob. 14.3.1RQCh. 14 - Prob. 14.3.2RQCh. 14 - Prob. 14.3.3PACh. 14 - Prob. 14.3.4PACh. 14 - Prob. 14.3.5PACh. 14 - Prob. 14.3.6PACh. 14 - Prob. 14.4.1RQCh. 14 - Prob. 14.4.2RQCh. 14 - Prob. 14.4.3PACh. 14 - Prob. 14.4.4PACh. 14 - Prob. 14.4.5PACh. 14 - Prob. 14.4.6PACh. 14 - Prob. 14.4.7PACh. 14 - Prob. 14.4.8PACh. 14 - Prob. 14.2CTECh. 14 - Prob. 14.3CTE
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