Question: The Internet is affecting holiday shipping In years past the

The Internet is affecting holiday shipping. In years past, the busiest shipping period was Thanksgiving week. Now as people have become comfortable with e- commerce, they purchase later in the year and are more likely to have gifts shipped (rather than purchasing locally). FedEx, along with Amazon and other e- commerce firms, hires extra workers during this period, and many regular workers log substantial overtime hours.
a. Are the marginal and average costs of Inter-net retailers likely to rise or fall with this extra business? (Discuss economies of scale and the slopes of marginal and average cost curves.)
b. Use side- by- side firm- market diagrams to show the effects on the number of firms, equilibrium price and output, and profits of such a seasonal shift in demand for e-retailers in both the short run and the long run. Explain your reasoning.

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  • CreatedNovember 13, 2014
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