Question: (a) Define the short and long runs and explain why it is important to distinguish between them. Provide an example of a firm for

(a) Define the short and long runs and explain why it is important to distinguish between them. Provide an

(a) Define the short and long runs and explain why it is important to distinguish between them. Provide an example of a firm for which the short run might be very short (days or weeks) and one for which it might be very long (months or years). (b) Why are economists concerned about implicit costs? Unique pays its financial advisor an annual fixed amount of 40,000. Carefully explain whether the amount of 40,000 is an explicit or an implicit cost. (c) Complete the following table: Q 1 23452 4 TFC TVC STC AFC 100 10.00 130.00 AVC 8.00 SATC 31.50 SMC 5.00 (d) Two firms, Unique and Infuse.com operate in the confectionery industry and sell their product at P = 20 per unit. If Unique's TFC = 40 and AVC = 10, and Infuse.com's TFC = 90 and AVC= 5. (1) Determine the break-even output of Unique and Infuse.com. Why is the break-even output of Unique.com larger than that of Unique? (ii) Find the degree of operating leverage for Unique and Infuse.com at Q=7 and at Q = 8. Why is the degree of operating leverage greater for Infuse.com than for Unique? Why is the degree of operating leverage leverage greater at Q=7 than at Q = 8? (a) Define the short and long runs and explain why it is important to distinguish between them. Provide an example of a firm for which the short run might be very short (days or weeks) and one for which it might be very long (months or years). (b) Why are economists concerned about implicit costs? Unique pays its financial advisor an annual fixed amount of 40,000. Carefully explain whether the amount of 40,000 is an explicit or an implicit cost. (c) Complete the following table: Q 1 23452 4 TFC TVC STC AFC 100 10.00 130.00 AVC 8.00 SATC 31.50 SMC 5.00 (d) Two firms, Unique and Infuse.com operate in the confectionery industry and sell their product at P = 20 per unit. If Unique's TFC = 40 and AVC = 10, and Infuse.com's TFC = 90 and AVC= 5. (1) Determine the break-even output of Unique and Infuse.com. Why is the break-even output of Unique.com larger than that of Unique? (ii) Find the degree of operating leverage for Unique and Infuse.com at Q=7 and at Q = 8. Why is the degree of operating leverage greater for Infuse.com than for Unique? Why is the degree of operating leverage leverage greater at Q=7 than at Q = 8?

Step by Step Solution

★★★★★

3.51 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Short Run The short run refers to a period in which at least one input is fixed typically capital while others like labor are variable In the short ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

It was suspected that two babies had been switched in a hospital. Mr. and Mrs. Brown received baby #1 and Mr. and Mrs. Green received baby #2. Blood typing tests on the parents and the babies showed...

Select a recent promotional campaign carried out by a company and discuss the ethical implications of the campaign. How does the company ensure that its promotional strategies adhere to ethical...

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...

Explain why it is important to distinguish between these concepts and how an understanding of these assists in selecting appropriate life cycles.

READ the article, NBAA Humanitarian Emergency Response Operator (HEOR) Database (https://nbaa.org/aircraft-operations/hero-database/humanitarian-groups/ ), presented by the National Business Aviation...

Super-Power ltd sold 20,000 units of products at Rs 40 per unit. Variable costs are Rs 28 per unit of which Rs 22 per unit are manufacturing costs and Rs 6 per unit are selling costs. Fixed costs are...

Define the short and long runs and explain why it is important to distinguish between them. Provide an example of a firm for which the short run might be very short (days or weeks) and one for which...

1. Trotter Inc is a polling company. Trotter uses both labor, L, (measured in hours worked) and capital, K, (measured in phone lines) to conduct surveys. The production function of Trotter's is given...

1- Analysis of the short and long runs indicates that the ______ assumptions are most appropriate in ______. a. classical; both the short and long runs. b. Keynesian; both the short and long runs. c....

11. The IS-LM model is generally used: a. only in the short run. b. only in the long run. c. both in the short run and the long run. d. in determining the price level. 12. In the Solow growth model,...

5 : Suppose that a firm uses data on its use of capital and labor over time to estimate its own production function and finds: lnQ=1.3+0.2lnK+0.7lnL a. An investor is interested in providing start-up...

Evaluate 11 F. dS, with F(x, y, z) = (x, y, z), and S the part of the plane x+y+z=1 with x 0, y 0, and z 0. Let v = (0, 0, z) be the velocity field (in meters per second) in R. Compute the volume...

Display all the leading measures like - the number of claims, the amount claimed, amount claimed on the property, and the amount claimed on the vehicle. 2. Identify the correlation between the...

Select all that apply In the past 2 0 years, Americans have: ( More than one answer may be correct. ) Multiple select question. added an additional work week to every year started working longer...

What are the dangers to M&S of moving its market position too far and too fast? How can it try to alleviate these problems?

You are the financial risk manager at Freedom Power in Butte Montana. In terms of heating degrees days H, your profits are Your profit function is -0.00014H2 + 0.24H -90. H is normally distributed...

Represent the following decimal numbers in binary sign/magnitude using 16 bits: -29 elect one. O a. 1000 0000 0001 1101 Ob. 1111 1111 1110 0011 O 1000 0000 0001 1111 Od. 1111 1111 1110 1011

Michael makes a living by fetching workers to and from a nearby factory with an old bus. However, the old bus that he was driving was not considered as roadworthy by the authorities. He does not have...

The latest version of Canada's Food Guide (2019) is criticized for being strongly influenced by food industry or lobbying/marketing interests TrueFalse

A considerable number of initial public offerings (IPOs) of stock in a company evidence a substantial run-up in price during early trading. Explain why asymmetric information between the investment...

Why does economic theory imply that the most harmful effects of the minimum wage law will fall on the most disadvantaged and least productive workers?

In general the aggregate demand for and the supply of labor increases over time. Can we predict what will happen to real wage rates and employment over time? What factors are responsible for the...

How many complete meals do you eat daily?

3. How would you describe your style of interviewing? Does your style change when youre the interviewer versus the interviewee? If so, how?

6.2a Define relational conflict 6.2b Describe ways of managing relational conflict