Job #2 Managerial Economics and Globalization

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 Assignment 2 Managerial Economics and The positive effect Essay

Assignment #2

Mariela Silvestri

Olga Drepina

Managerial Economics and Globalization

Oct, 31st, 2011.

Assignment 2

Office building routine service plans call for the stripping, waxing, and buffing of ceramic floors tiles. This work is usually contracted out to office protection firms, and both technology and labor requirements are extremely basic.

Source and require conditions in this perfectly competitive service industry in New york city are:

QS = 2P - 20| (Supply)

|

QD = 80 - 2P| (Demand)

- Where Q is hundreds or even thousands of hours of floor reconditioning each month, and G is the selling price per hour.

A. | Algebraically determine the market equilibrium price/output combination. | | 2P -20 sama dengan 80-2P| |

2P + 2P = 85 + 20| |

4P = 100| | |

P sama dengan 25| | |

| | |

Qs = 2(25) -- 20 | Qd = 80 - 2(25)

Qs = 50 - 20| Qd sama dengan 80 - 50

Qs = 30| | Qd = 30|

| | |

Qs = Qd = Qe | |

|

M. Use a graph to confirm your answers.

Intended for the chart, use:

Prices: 10, twenty, 30, forty five, 50, 70, 70, 70, 90

Quantities: five, 10, 15, 20, 25, 30, thirty five, 40, forty five, 50, fifty five, 60, 66

|

| A large number of hours/ month| Price/hour| Qs| Qd

Q| P| Supply| Demand

10| 10| 0| 60

15| 20| 20| 40

20| 30| 40| 20

25| 40| 60| 0

30| 50| 80| 0

35| 60| 100| 0

40| 70| 120| 0

45| 80| 140| 0

50| 90| 160| 0

The figure beneath shows a firm in a perfectly competitive marketplace:

a. Find the price under which the company will go out of business.

The shutdown point may be the point where the price equates to minimum normal variable expense. In the short run the company will probably be out of business in the event the price should go below P2; because in case the price declines further, the firm would not even cover its variable costs whether it operates. Its loss if this operated thus exceeds the losing of shutting straight down and so the company shuts down. Inside the short run, within a perfectly competitive market firms can earn an economic income....

References: Paul, F. (2010). Economics to get Managers. Nyc: Pearson Learning Solutions.

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