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Chapter 8 Note - Chapter 8 Supply The Costs of Doing...

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1 Supply: The Costs of Doing Business Microeconomics, Seventh Edition Microeconomics, Seventh Edition Boyes /Melvin /Melvin Chapter 8 2 Morita’s Cost Curve Akio Morita, founder of Sony Corporation, drew this cost curve for transistor radios. He saw that per-unit costs would fall initially and then rise. He turned down an order for 100,000 units because he thought it would be risky to increase production levels that high. He asked “What if there were no repeat order the next year?” 3 Firms and Production • The number of resources a firm uses and the amount spent on selling activities depends on how much they contribute to the value of the firm. • In general, the more the firm wants to supply the more resources it must have.
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