Fill out the following document to provide information about your company to potential investors.
Company Vision: _
Company Mission Statement: _
Target Customer (Who Does the Customer Look Like): _
2. The HernaahI-Hlmhmanlndex An A: 5
Suppose that three rms make up the entlre wlg manufactung Industry. One has a SUE-h market share, and the
other two have a 25% market share each.
The Herndahl-lesehman Index uftl'lls Industry I5 3,?5D i" .
li'tiu can now applyr this analvsls to production costs. When the marginal cost curve Is below the average total cost
curve, the average total cost must be decreasing v . When the marginal cost curve is above the average total
cost curve, the average tota
6. Costslnseshortrunversmlnselongrun Aa Aa a
Ike's Bikes is a major manufacturer of bicycles. Currently, the oompanv produces hikes In one factory. However, it
is oonsidering expanding production to two or even three factories. The following table shows t
4. Prot maximization In the cost curve diagram A: Ail E
Conslder a oompetltlue market for teddy bears. The following graph shows the daily oost curves of a rm operating In thls
PRIEE AND COST IDollars per bear]
4. Predatory pricing and resale price maintenance A: ha a
Televik Is a firm that produces televisions. Suppose Televirir sells its televisions to retail stores for $1,EH:IEII each and
requires those retailers to marge customers $1,1DD for each television.
1. Various measures ofcoot A: Aa Ea.
Douglas Fur (0F) Is a small manufacturer of fake-fur boots In Chicago. 1135 total cost or production is given In the following table.
Fill in the remaining cells of the table.
Quantity Total Cost Marginal cost Fixed
The law of dimlnlshlng returns to labor ls demonstrated by whlch of the following?
0 Total output decllnes as you Increase the quantlty of labor.
0 Total output Increases only when you Increase both labor and ovens.
of Q Total output Increases at a decrea
1. Lnnn-runmtrelatlhnshlps na Aa 2
The fpllpwlng graph shpws the short-run average total east curves and the one lung-run average total cast curve for
a publishlng rm. The ve marked quanties show where each short-run average total east cfw_ATE curve is ta
In the long run, over which range of output levels does Ike's experience diseoonornles of scale?
of E] More than 400 bikes per month
0 Between 200 and 4GB oli<es per month
0 Fewer than 200 bikes per month
Explanation: Bloc A
A rm EXDEI'IEI'IDES diSEDDI'
0n the following graph, use the orange polnts (square symbol) to plot the portlon of the llrrn's short-run supply curve that
con-responds to prlces where there Is posltlue output. Une segments wlll automatlncallyI connect the polnts. Remember to plot
Explamtlon: Blue A
The Average Total lCost table provldes data for each of the three short-run average total cost curves. The point for
each output level that corresponds to the lowest possible average total cost prcvldes data for the long-run
5. Deriving the short-run supply curve A3 113 E
Cohslder the competltlve market for ceiling halogen lamps. The following graph SI'IDWS the marginal CD51 cfw_MC, average total 0051
cfw_ATCL and average varlable cost cfw_AVE curves for a typical rm In the I
In the long run. if the rm decides to keep output at its Inltlal level, It will likely:
0 Shut clown
O Shift to operate on ATCI
O Shift to operate on ATC3
Explanation: Elm A
In the short run, the firm can choose to operate at any point a
Assume that labor is Larnfs only varlable cost If he has a xed cost of $100 per day and pays each of his women's $6D per day,
use the orange polnts (square symbol) to plot Larry's total cost curve on the folluwlng graph using the quantltles from the
a. Pro-duo:- tlleorv with lsoquantr. A. ha a
Suppose a firm has two Inputs, capltal and labor. The followlng table shows how mud-I labor the rm needs to
produce 2GB, 4GB, or 600 units of output If it has 1, 2, 3. or 4 unit: of capital:
Labor Input [Hours]
For each price in the following table, use the graph to deterrnlne the number of lamps this rrn would produce In order to
maximize its profit. Assume that when the price Is exactlv equal to the average variable cost, the rm Is Indifferent between
Antitrust Policy and Regulation
Graded Assignment | Read Chapter 12 | Back to Home Due Sundayr 01.25.14 at 11:45 PM
This problem set reviews the major concepts surrounding antitmst policy and regulation, including the legal history of antitmst
Suppose a new rm, Mane Attractlon, enters the wlg manufacturing Industry and Immedlately captures a 20% share
or the market. Thls would cause the HerllndahI-lesd'lman Index for the Industry to fall of .
Explanatlon: lm A
The Herndahl-leschman Index measur
Suppose that the government forces the monopolist to set the price equal to marginal cost. In the shalt run, under a
marginal-cost pricing regulation, the monopolist will provide cable services to 51,000 a! households per month at
a price of $20 if .
For each prloe in the following table, calculate the flrrn's optimal quantity of units produced and determine the prot or loss If it
produces at that quantity, using the data from the previous graph to identify its total variable cost. Assume that if the
Plot the results for each game and Illctcrs overall average free-throw percentage after each game on the followlng
graph. Use the green polnts [triangle symbol] to plot Ulctor's overall average, and use the orange polnt: [square
svmbol to plot hls result
1. To regulate or not to regulate Ha ha EL
Slnoe the late 19?Ds, the United States government has deregulated several Industries, such as the airline, trucking,
and railroad Industries. Which of the following is true regarding this deregulation movement?
0. Regulating I'lilhll'all'lllll'lpl'f ha ha =
Consider the local cable company, a natural monopoly. 11'le following graph shows the demand curve for cable
services, the company's marginal revenue ourve cfw_labeled HR], Its marginal cost ourve cfw_labeled
Costs and the Changes at Firms over Time
Graded Assignment | Read Chapter 8 | Back to Home Due Sunday 01.19.14 at 11:45 PM
ThE problem set introduces short-mo and long-mo costs, input selection with one variable input, the choice of optimal input
Explanation: close A
The rm will choose to produce the quantity at which Pfor = MC. At a price of $5 per hear, that quantity Is 10,000 pears per
oav; at a price of $12 per bear, that quantity ls 30,000 hears per day: and at a price of $10 per hear, that
5. When fewer firm: are better a A: E
Wei: Elinger is an Internet service provider. In the long run, Web Elinger can provide Internet service for 20,000
homes ead'l month at a total east of $700,000, Internet service for 30,000 homes at a total east of $2
On the following graphIr plot DFs average total cost cfw_ATE curve uslng the green points (triangle svmbol. Next, plot its average
variable cost cfw_AVE curve uslng the purple polnts [diamond svmool]. Flnallv, plot Its marginal oost (MC) curve using the o