c) In merging with Air Jamaica, Caribbean Airlines sought to gain an advantage from operating with economies of scale. Discuss the ways in which this merger may have caused Caribbean Airlines to suffer from internal diseconomies of scale.
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c) In merging with Air Jamaica, Caribbean Airlines sought to gain an advantage from operating with economies of scale. Discuss the ways in which this merger may have caused Caribbean Airlines to suffer from internal diseconomies of scale.
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- In merging with Air Jamaica, Caribbean Airlines sought to gain an advantage from operating with economies of scale. Discuss the ways in which this merger may have caused Caribbean Airlines to suffer from internal diseconomies of scale.One of the many mergers that have occurred around the world is Amazon. com-AMC Entertainment. Explain the nature of the merger between these two businesses. Determine the economic motivations for the merger, as well as ONE of its cost-of-production implications.In merging with Copa, WestJet sought to acquire an advantage from operating with economies of scale. Discuss the ways this merger may have caused WestJet to suffer from internal diseconomies of scale.
- For many airlines in the short run, a major portion of the cost of production, such as aircraft and terminal space is fixed. Should these very large FCs be ignored when the revenue managers are making output and pricing decisions? Provide at least 2 reasons why they should or should not be ignored.3-) Use the following information to answer the questions below: The Kentucky Coal Company sells its coal in a nearly perfectly competitive market. It estimates its total costs of production as TC=1000+40+0.0502 where Q-tons of coal per day. a-) What is the fixed cost for this firm? b-) What is the total variable cost when quantity is 10 units? c-) What is the marginal cost of producing 10 units? I P(S) 15 ATC 10 S A 125 150 160 4-) How much profit does the profit-maximizing monopolist pictured in the diagram have? MCan American multinational that sells consumer electronic products, has manufacturing facilities in three countries: Brazil, Thailand, and Canada. The average hourly wage rate, output per worker, and annual overhead cost for each location are as follows: Given the above figures, is Storm currently allocating its production resources optimally? If not, what should it do? Justify your answer. Now, suppose that Storm is planning to consolidate all its manufacturing into one facility. Where should it locate? Justify your answer.
- The El Dorado Star is the only newspaper in El Dorado, New Mexico. Certainly, the Star competes with The Wall Street Journal, USA Today, and The New York Times for national news reporting, but the Star offers readers stories of local interest, such as local news, weather, high-school sporting events, and so on. The El Dorado Star faces the demand and cost schedules shown in the spreadsheet that follows: a- Create a spreadsheet using Microsoft Excel (or any other spreadsheet software) that matches the one above by entering the output, price, and cost data given. b- Use the appropriate formulas to create three new columns (4, 5, and 6) in your spreadsheet for total revenue, marginal revenue (MR), and marginal cost (MC), respectively. [Computation check: At Q = 3,000, MR = $0.50 and MC = $0.16]. What price should the manager of the El Dorado Star charge? How many papers should be sold daily to maximize profit? c- At the price and output level you answered in part b, is the El Dorado Star…Explain environment factor demographic, economic, socio cultural and technological forces that influence Tesco to divest its business in Malaysia and Thailand, given that Tesco is one of the pioneers to introduce online purchase and delivery among other hypermarkets through its Grocery Home Shopping Service.D) Granite Tops for You uses 15 units of capital at $5,000 per unit and employs 50 employees at a cost of $500 each. What is the company's fixed cost? A) $250,000 B) $500 C) $75,000 Which of the following is used to measure market structure and performance? B) Four-firm concentration ratio A) Eight-firm concentration ratio C) HHI (Herfindahl-Hirschman index) D) All of the answers are correct. An industry is comprised of 40 firms, each with an equal market share. What is the four-firm concentration B) 0.1 ratio of this industry? A) 02 C) 0.3 D) 0.4 D) $5,000 tly competitive market, then it will most likely
- Practice Problem 1: Two firms produce homogeneous goods with constant marginal costs c = 2. The market demand in each period is P(Q) =10 - Q where Q is output. (a) Compute Cournot (quantity competition) profits in this market (for which you need to compute output and prices, of course).(b) Compute the monopoly profit in this market. That is, what a firm with the same cost function would make if it were the only one in the market (and what a cartel of the two firms would decide to produce in this market).(c) Suppose that one firm produces half the output that you computed in (b). Compute the best response of the other firm, and explain why in one period an agreement between the two firms to produce each half the monopoly output (and so get half the monopoly profit) would not be honored..Questions Read the extract about space tourism from an Economist article below. Please answer the following questions: 1) Assess the cost-structure of the Virgin Galactic or Blue Origin ventures; and the strategic implications of this type of cost structure. (25 marks) 2) Identify the market structure of the Space Tourism industry and the main dimensions of competition and options Virgin Galactic may have to increase its market share, including what pricing strategies the firms do or should apply. (25 marks) 3) Please discuss whether and how managerial theories may apply to Virgin Galactic or Blue Origin? (25 marks) 4) Discuss and evaluate the potential expansion strategies available for Virgin Galactic. (25 marks) **** Will Sir Richard Branson’s Virgin Galactic jaunt boost space tourism? “IT WILL BE humbling. It will be spiritual.” This is how Virgin Galactic wooed customers with the prospect of a moment in space in 2004. Within five years, the space-tourism firm claimed, it…2. You are the Southeastern Michigan regional manager at Coca-Cola, responsible forproduction and pricing in the Metro Detroit area. Your primary competitor is Pepsi. The marketresearch team at Coca-Cola is thinking about launching a new product, Orange Vanilla Coke, toboost the brand. The cost function to produce a 12-pack of 12 fl. oz. cans of Orange VanillaCoke is C(qcoke) = 0.25qcoke and the market research team has estimated inverse market demandfor a 12-pack of this new “pop” in Southeastern Michigan to be P = 10.25 – 0.00025Q. a. Assuming Pepsi decides not to produce a similar product, allowing Coca-Cola to maintainmonopoly power in the market for orange vanilla cola, what price and quantity will youchoose to maximize profit? How much profit does Coca-Cola earn?b. What price and quantity you would choose to maximize profit if Pepsi spies discover yourproduct before launch, allowing Pepsi to produce and launch an identical product at the sametime. For your answer, assume the cost…
