Which of the following scenarios does not illustrate a long-run adjustment? BMW builds a new assembly plant in South Carolina OA local pizza parlor hires two new employees. Three firms leave the retail clothing industry. Five new vineyards are opened in Arizona
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- Which are the following are short-run and which are the long-run adjustment? Explain in your own words with the help of examples. Wendy’s builds a new restaurantHarley-Davidson corporation hires 200 more production workers.A farmer increase the amount of fertilizer used on his corn cropAn Alcoa aluminum plants add a third shift of workersWhich of the following is an example of a long run adjustment? Your university offers Saturday morning classes next fall. Ford Motor Company lays off 2,000 assembly line workers. A soybean farmer turns on the irrigation system after a month long dry spell. Wal-Mart builds another SupercenterWhat factors account for a fall in the long-run cost curve?
- A student has just written on an exam that, in the long run, fixed cost will make the average total cost curve slope downward. Why will the professor mark it incorrect? In the long run, fixed cost increases as firms build new plants and purchase new capital. This means that the average total cost curve will eventually slope upward. In the long run, firms have no fixed cost—all costs would be variable. The shape of the long-run average total cost curve is determined by economies of scale. In the long run, fixed cost decreases as costs are spread out over a greater quantity of output. Declining fixed cost accounts for the downward-sloping average total cost curve. In the long run, there are no fixed costs, meaning the average total cost curve shifts down.Think about several different types of industries or markets and the amount of time it might take to change the scale of operation and the size of the production facility for each of these examples. The long-run is a period of time long enough so that all inputs, including facility and equipment, are variable, while in the short run at least one input is fixed. Think about how much time it would take to change the scale of operation for a restaurant, for an automobile plant, for a website designing company... Does it seem that the amount of time that separates the long run from the short run is industry-specific, rather than a set period of time? Share three specific examples. Describe in detail how Diminishing Marginal Product arises from the assumption that some of a business's inputs are in fixed quantity over the period of time that is the short run. Often the convention is to assume that the business's production facility and the capital stock within it are the fixed factors of…Plant sizes get larger as you move from Plant 1 to Plant 4. In the long run, the firm should use Plant 3’s size for what level of output?
- Paul owns and operates his own business. To keep up with new technology, he spends $3,000 per year upgrading his computer equipment. He runs the business out of an office in the center. If he didn't use the office as his business office, he could rent it out for $12,000 per year. Paul knows that if he didn't run his own business, he could return to his previous job with a salary of $100,000 per year. Other expenses amount $25,000 per year. How much total revenue does Paul need to make in order for him to want to remain self-employed? A) $128,000 (B) $140,000 C) $28,000 D) None of the answers are correct.Q. 5 Which are the following are short-run and which are the long-run adjustment? Explain in your own words with the help of examples. a) Wendy's builds a new restaurant b) Harley-Davidson corporation hires 200 more production workers. c) A farmer increase the amount of fertilizer used on his corn crop d) An Alcoa aluminum plants add a third shift of workers.Ike’s Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company’s short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Number of Factories Average Total Cost (Dollars per bike) Q = 100 Q = 200 Q = 300 Q = 400 Q = 500 Q = 600 1 360 200 160 240 400 720 2 540 300 160 160 300 540 3 720 400 240 160 200 360 Suppose Ike’s Bikes is currently producing 500 bikes per month in its only factory. Its short-run average total cost is per bike. Suppose Ike’s Bikes is expecting to produce 500 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using . On the following graph, plot the three SRATC…
- Ike’s Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company’s short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Number of Factories Average Total Cost (Dollars per bike) Q = 100 Q = 200 Q = 300 Q = 400 Q = 500 Q = 600 1 360 200 160 240 400 720 2 540 300 160 160 300 540 3 720 400 240 160 200 360 Suppose Ike’s Bikes is currently producing 600 bikes per month in its only factory. Its short-run average total cost is per bike. Suppose Ike’s Bikes is expecting to produce 600 bikes per month for several years. In this case, in the long run, it would choose to produce bikes usingone factory . On the following graph, plot…Austin owns the Fruit Bowl Inc company. Which of the following would be short run decisions for Austin? A) what kind of machinery to purchase B) how many workers to hire C) what kind of truck to buyAdam operates a factory that produces beach towels. His current level of output equals 2000 towels per week. His weekly variable cost equals $12 000. If the total cost each week equals $13 500, what can you conclude about the fixed costs of production? The total cost equals $25 500. The total fixed cost equals $12.75 per towel. The average fixed cost equals 75 cents per towel. The average fixed cost equals $1500,