Advertising and Corporate Clusters Consider corporations that use advertising firms to develop marketing campaigns. Each corporation buys one campaign per year, and the cost per campaign is $120?n, where n ? the number of corporations in the cluster (and campaigns per year). The cost of labor per firm is $30 ? n. A corporation’s profit equals its total revenue of $200 minus the sum of its marketing and labor costs. There are two location options: an isolated site (n ? 1) or a cluster with up to five corporations. Use a graph like Figure 3–2 to show the profit gap (profit in cluster − profit in isolation) for one through five corporations. If initially all corporations are isolated and then one joins another to form a two-corporation cluster, other firms [will, won’t] have an incentive to join

Gloria decided to open her own business and earns $50,000 in accounting profit the first year.  When deciding to open her own business, she turned down three separate job offers with annual salaries of $50,000, $60,000, and $70,000.  What is Gloria's economic profit from running her own business?    Question 5 options:   a)  -$75,000   b)  -$20,000   c)  $20,000   d)  none of the above

The Lead Zeppelin Company produces powered and steerable lighter-than-air craft. The company’s airships are specially lined and are therefore safer than normal dirigibles. The table below shows the weekly production of dirigibles, along with the associated Average Cost and Total Revenue figures (the Average Cost and Total Revenue figures are actually in thousands of dollars, so the $15 represents $15,000, but we have left off the zeros to save space).   Quantity Average Cost Total Cost Total Revenue 0  -- 0 $0 1 $15 15 $10 2 $9 18 $20 3 $8 24 $30 4 $8.50 34 $40 5 $9 45 $50 6 $10 60 $60 7 $12 84 $70   The Lead Zeppelin Company has decided that it will produce at least 1 dirigible. Now the question becomes, how many more dirigibles should it produce to make as much profit as possible?   Use the profit-maximizing rule to explain how many dirigibles the Lead Zeppelin Company should produce to…

4. Smarty’s Dish company manufactures household and commercial satellite dishes according to the production function. C(Q1, Q2) = 100 + 5Q1 + 2Q2 + .5Q1Q2 Where Q1 and Q2 are household and commercial satellite dishes produced in a day, respectively. Suppose Smarty produces 10 household dishes and 8 commercial dishes per day. Should he divide production into separate facilities? Why? a. No. The firm enjoys cost complementarities b. Yes, because the firm does not realize cost complementarities c. No, because even though the firm does not enjoy cost complementarities, it does realize economies of scope at this level of output. d. Yes, because the firm does not enjoy cost complementarities, and it does not realize economies of scope at this level of output.

Costs and Profit Maximization: Work It Out 1 Suppose Margie decides to lease a photocopier and open up a black-and-white photocopying service in her dorm room for use by faculty and students. Her total cost, as a function of the number of copies she produces per month, is given in the table. Number of Photocopies Per Month Total Cost Fixed Cost Variable Cost Total Revenue Profit 0 $100         1,000 $110         2,000 $125         3,000 $145         4,000 $175         5,000 $215         6,000 $285         a. Fill in the missing numbers in the table, assuming that Margie can charge 6 cents per black-and-white copy. Margie's fixed cost is: $       Variable cost, 0 photocopies/month: $     Variable cost, 1,000 photocopies/month: $     Variable cost, 2,000 photocopies/month: $     Variable cost, 3,000 photocopies/month: $     Variable cost, 4,000 photocopies/month: $…

Would you expect two farms of widely different size to have the same fixed costs on their enterprise budgets for the same enterprise? Might economies or diseconomies of size explain any differences?

Provide details/explanations of your solutions,indicate any formulas you are using and clearly show your work.

No cost function has been provided. Please see attached.

I was wondering I could get help with the question below? Thanks in advance!   A firm has three different production facilities, all of which produce the same product. While reviewing the firm’s cost data, Jasmin, a manager, discovers that one of plants has a higher average cost than the other plants and suggests closing this plant. Another manager, Joshua, notes that the high-cost plant has high fixed costs but the that the marginal cost in this plant is lower than in the other plants. He says that the high-cost plant should not be shut down but should expand its operations. Who is right?