Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 7, Problem 29RQ
Why will firms in most markets be located at or close to the bottom of the long-run avenge cost me?
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Chapter 7 Solutions
Principles of Economics 2e
Ch. 7 - A firm had sales revenue of 1 million last year....Ch. 7 - Continuing from Exercise 7.1, the films factory...Ch. 7 - The WipeOut Ski Company manufactures skis for...Ch. 7 - Based on your answers to the WipeOut Ski Company...Ch. 7 - If two painters can paint 200 square feet of wall...Ch. 7 - Return to the problem explained in Table 7.13 and...Ch. 7 - Suppose the cost of machines increases to 55,...Ch. 7 - Automobile manufacturing is an industry subject to...Ch. 7 - What are explicit and implicit costs?Ch. 7 - Would you consider an interest payment on a loan...
Ch. 7 - What is die difference between accounting and...Ch. 7 - What is a production function?Ch. 7 - What is the difference between a fixed input and a...Ch. 7 - How do we calculate marginal product?Ch. 7 - What shapes would you generally expect a total...Ch. 7 - What are the factor payments for land, labor, and...Ch. 7 - What is the difference between fixed costs and...Ch. 7 - How do we calculate each of the following:...Ch. 7 - What shapes would you generally expect each of the...Ch. 7 - Are there fixed costs in the lung-run? Explain...Ch. 7 - Are fixed costs also sunk costs? Explain.Ch. 7 - What are diminishing marginal returns as they...Ch. 7 - Which costs are measured on per-unit basis: fixed...Ch. 7 - What is a production technology?Ch. 7 - In choosing a production technology, how will...Ch. 7 - What is a long-run average cost curve?Ch. 7 - What is the difference between economies of scale,...Ch. 7 - What shape of a long-run average cost curve...Ch. 7 - Why will firms in most markets be located at or...Ch. 7 - Small Mom and Pop firms, like inner city grocery...Ch. 7 - A common name for fixed cost is overhead. If you...Ch. 7 - How does fixed cost affect marginal cost? Why is...Ch. 7 - Average cost curves (except for avenge fixed cost)...Ch. 7 - What is the relationship between marginal product...Ch. 7 - It is clear that businesses operate in the short...Ch. 7 - Retune to Table 7.2. In the top half of the table,...Ch. 7 - How would an improvement in technology, like the...Ch. 7 - Do you think that the taxicab industry in large...Ch. 7 - A firm is considering an investment that will earn...Ch. 7 - Return to Figure 7.7. What is the marginal gain in...Ch. 7 - Compute the average total cost, average variable...Ch. 7 - A small company that shovels sidewalks and...
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Similar questions
- If the firm wants to sell 70 units as a block and not individually, what price will the firm charge for the block? Please show your calculations Note: The answer should be typed.arrow_forwardDescribe the situations under which a firms capacity must lag and lead to the demand ?arrow_forward09.arrow_forward
- Assume that firm A is offered a supply of essential components by an outside supplier for a price less than the full cost of firm A making them. Explain why firm A might reject this offer.arrow_forwardAn airline is selling tickets for a flight from London to Frankfurt. The price of an economy class ticket three months before the flight date was £30. The price of the same ticket one day before the flight is £300. Your friend, who knows you have studied Industrial Organization, asked you to explain why there’s this difference in price.arrow_forwardIf Redstone wishes to maximize its profit margin, how many units should it produce?arrow_forward
- Is this a good example of a sunk cost? Why or why not? “As an entrepreneur, advertising your product correctly is the most crucial thing. As I started my small business at the beginning of the year 2019, I had put around $400 in ads through Instagram and Facebook but wasn’t getting results. I had a low engagement, few clicks, and no sales during the start of my business. “arrow_forwardWhy is knowing (or estimating) the product demand so crucial for a firm? What are the differences between estimating and forecasting demand? In your response, include an example of a business that has suffered from poorly forecasting the demand of its products. Evaluate how or why the business made such a mistake.To keep our discussion more interesting, please use examples that are not from our textbook.arrow_forwardGeorge’s T-Shirt Shop produces 5,000 custom printed T-shirts per month. George’s fixed costs are $15,000 per month. The marginal cost per T-shirt is a constant $4. What is its break-even price? What would be George’s break-even price if he were to sell 50% more shirts?arrow_forward
- Q9arrow_forwardA manufacturer is said to break even when their revenue is equal to their costs. ImplausiCorp's total cost to manufacture x items is given by the expression 20x + 36000. Their revenue from selling items is 80x. How many items must they manufacture and sell in order to break even? items.arrow_forwardTim Marlow, the owner of The Clock Works, wanted to know how many clocks he must sell in order to cover his fixed cost at a given price. Tim knew that he had a fixed cost of $20,000 for equipment, taxes, and a bank loan. He also had a unit variable cost of $20 per clock for labor, materials, and promotional costs. If the price Tim charges for each of his clocks is $40, what is his break-even point quantity?arrow_forward
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