Adriana Caselotti's company developed a new product ten years ago. Ever since, Adriana has managed production of the product with minimal worker turnover. Over that time, the average cost to the firm has decreased by 30%. This is due to improvements in production methods leading to greater efficiency. Rival firms have not achieved such reduced costs. The cost advantage enjoyed by Adriana's company is called achieved through marginal cost reduction; long-term production a key input price reduction; unique cost advantages a unique cost advantage; learning by doing mass production; key input price reduction

Scenario 15-2 The information below applies to a competitive firm that sells its output for $40 per unit. When the firm produces and sells 140 units of output, its average total cost is $24.5. When the firm produces and sells 141 units of output, its average total cost is $24.60. Refer to Scenario 15-2. Suppose the firm is producing 140 units of output and its fixed cost is $975. Then its variable cost amounts to O a. $9,360.25. O b. $2,455.00. O c. $3,430.00. O d. $7,500.00.

This question deals with cost curves and isoprofit curves. Keep in mind that the formula for a firm's cost function is: TC = FC + C(Q) TC → Total Costs: FC → Fixed Costs: C(Q) → Cost of production*Quantity produced → also known as Variable Costs Q2: Firms A and B are two firms supplying products in two separate differentiated goods markets. Equations (1) and (2) give the total cost functions of the two firms: - Firm A: TC = 2Q --- Equation (1) %3D - Firm B: TC = 10 + 2Q --- Equation (2) Each firm has the ability to produce a maximum quantity of 80,000 units in ten batches of 8,000. The cost of production per unit for each firm is $2. Firm B has a fixed cost of $10. (a) Plot isoprofit curves valuing $34,000 and $60,000 for each of the two firms. Can you provide an explanation for any differences that may exist? (b) Use the information given about firms A and B and appropriate diagrams/figures to explain how the equilibrium for both firms will change if a rival company increases its…

Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh                 Q1 = 12 – P1 Sri Lanka                    Q2 =   8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) (i)  Company is effectively able to price discriminate in the two markets. What will be the total profits? (ii)  Suppose the company does not engage in price discrimination. By charging the same price in the two markets what are the profit maximizing levels of price, output, and the  total profits? (iii) Analyze, with graphs, the two alternative pricing strategies available to the company.

The table shows cost data for a firm that is selling in a perfectly competitive market. This firm's minimum average variable cost is $14 and has fixed costs equal to $100. Output 5 7 9 11 11 units 9 units Refer to the above cost table. If the price of the product is $26, the firm will produce Select TWO answers from the choices below; one selection is the number of units produced and the second selection is the dollar amount of the loss earned by the firm. ✔$100 $30 $28 $0 7 units 00 units 5 units ATC $34.00 30.00 30.55 33.09 $182 MC $13 26 35 48 for a loss.

Please select all that are true regarding Minimum Efficient Scale (MES):     if the quantity demanded is equal to Qmes, then the lowest cost solution is for one firm to supply the market     MES is the quantity produced where average costs for a firm are at a minimum     Long run average costs include fixed cost steps as quantities (scale) increase     Quantities (x-axis) less than MES exhibit decreasing returns to scale due to diminishing marginal returns     Short run average cost curves are for a given level of fixed cost, individually     MES is the quantity demanded where total costs for a firm are at a minimum     Quantities (x-axis) greater than MES exhibit decreasing returns to scale due to diminishing marginal returns     Average costs do not include fixed cost since they don't change

The first graph depicts the industry supply and demand for yoga classes. Assume that the market is initially in equilibrium at the intersection of lines D and S. The second graph is the cost information for a single firm in this perfectly competitive industry. Assume there is an increase in the industry demand for yoga classes and the industry demand curve moves from D to D1. Furthermore, assume this is a constant cost industry. Shift the supply (S) curve to the correct positions to reflect long-run equilibrium in this constant cost industry. Next, use the interactive line to trace out the long-run industry supply curve (LRIS) for this industry. Price per class Yoga Industry Supply and Demand Short-run marginal cost Long-run average cost Short-run average cost S Price=Marginal revenue DRIS D1 Quantity of classes Quantity of classes Price ($)

a) Find the long run equilibrium price.  Find the minimum efficient scale of the typical firm. Find the typical firm’s average cost when it operates at minimum efficient scale. In the long run, what price will prevail in this market? In words, clearly justify your answer. Suppose demand is QD = 3,200 – 100P. (b) Explain why you expect the number of firms in this market to be fifty-five. In this market, what is the short run supply function of the typical firm? What is the short run market supply function? Suppose the local government introduced a $90 licensing fee that raised the fixed cost from $160 to $250. c) Would the introduction of the licensing fee affect the short run equilibrium price or quantity? Justify your answer? Clearly explain why you expect that in the long run fewer larger firms will operate in this market. After the introduction of the licensing fee, what is the new long run equilibrium price? How many firms will survive in this market?

Suppose a typical (representative) corn farm has a short run production technology which results in the outcome of U-shaped Average Variable Cost (AVC), Average Total Cost (ATC), and Marginal Cost (MC). Further, suppose this firm sells its product in a market where the price of the good is determined by the interaction of market Demand and Supply. Because an individual firm is very small compared to the rest of the market, we treat the market price as the price given to the firm, and the individual firm cannot impact that price.  assume we are in the Short Run for this firm. In graphing, put $ on the vertical axis and lower-case q (firm output) on the horizontal axis.    Start with the AFC0, AVC0, ATC0, and MC0 curves . show shifts in any of the cost curves, reflecting the higher cost of land (keeping in mind that this higher cost is independent of how much or how little corn is actually produced) and labeling the changed cost curves with a subscript 1. On the graph with $ on the…

Economics