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Chapter 7: Problem 3, on page 162.
•Chapter 8: Problem 4, a and b, on pages 179–180.
•Chapter 9: Problem 2 on page 193.
3. You are a newspaper publisher. You are in the middle of a one year rental contract for your factory that requires you to pay 500,000 per month, and you have contractual labor obligations of 1 million per month that you cannot get out of. You also have a marginal printing cost of 0.25 per paper as well as a marginal delivery cost of 0.10 per paper. If sales fall by 20 percent from 1 million papers per month to 800,000 papers per month, what happens to the AFC per paper, the MC per paper, and the minimum amount that you must charge to break even on these costs?
4.Assume that the cost data in the top table of the next column are for a purely competitive producer.
a. At a price of $56, will this firm produce in the long run? If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? What economic profit or loss will the firm realize per unit of output?
b. Answer the questions of 4a assuming the product price is $41.
Total product Average F cost Average V cost Average T cost M Cost
0 $45
1 $60.00 $45.00 $105.00
2 30.00 42.50 72.50
3 20.00 40.00 60.00
4 15.00 37.50 52.50
5 12.00 37.00 49.00
6 10.00 37.50 47.50
7 8.57 38.57 47.14
8 7.50 40.63 48.13
9 6.67 43.33 50.00
10 6.00 46.50 52.50
2. A firm in a purely competitive industry is currently producing 1000 units per day at a total cost of $450. If the firm produced 800 units per day, its total cost would be $300, and if it produced 500 units per day, its total cost would be $275. What are the firms ATC per unit at these three levels of production? If every firm in this industry has the same cost structure, is the industry in long-run competitive equilibrium? From what you know about these firms’ cost structures, what is the highest possible price per unit that could exist as the market price in the long-run equilibrium? If that price ends up being the market price and if the normal rate of profit is 10%, then how big will each firms accounting profit per unit be?
Around one page
Do an Internet search for the Web site of the corporation of your choice and find that corporation’s annual report to stockholders on the Web site.
•Does the company have characteristics of a perfect competition, monopoly, or oligopoly?
•How does competition in this industry help or hurt consumers?
•What does the annual report say about the corporation’s view of future business challenges and the market in which it operates?
•Does this corporation see long-run adjustments as described in this week’s textbook chapter readings?
•Consider both the microeconomic and macroeconomic views. Do you agree with the corporation’s view? Why or why not?
Due 2/2
After reading the case study The Coffee Crisis, write a 4–5 page analysis of the case. Address the following components in your paper, using the course concepts, theories, and resources as examples and evidence to support your analysis. Remember to follow APA format for all citations and references.
•Analyze the economic implications of operating in different market and industry structures.
•Analyze the following factors that have affected the coffee industry over time:
?Explain the effects of supply and demand generally and specifically related to the coffee industry.
?Analyze how new countries entering the market affect the coffee industry.
?Analyze how new products and marketing strategies entering the market affect the coffee industry.
?Explain consumer behavior and its implications for business decisions, related to the coffee industry.
Due 1/30
Around 1 page
Review “Last Word: Are Chief Executive Officers (CEOs) Overpaid?” on page 283 of your textbook. Discuss your thoughts on whether CEOs’ exceptionally high pay is economically justified. Explain your rationale.
Around one page
Is Microsoft a monopoly? Why or why not? If it is not now, was it ever? If it is, should it be broken up? Defend your position using the course texts, following proper APA format
Due 1/23

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