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Situation. You work as part of an analysis team for a consultancy that follows the semiconductor industry. Your boss saw the story from PC World and asked you to provide some analysis for an upcoming industry conference. There’s some concern as to whether Intel is executing properly to maintain its competitive edge against rival firms.
Your boss asks you a few questions and asks you to write him a short paper that explains Intel’s moves and make some recommendations. In your explanation, please address the following.
1) The PC World article states that Intel needs to have their new class of fabrication plants (Fabs) produce at a specified volume. Show why this is the case using the concept of cost curves to describe firm behavior such as that found on page 206 of the Baye text
Consider a perfectly competitive firm that is currently producing a quantity of one hundred units. At this level of output, suppose its marginal cost is $60 and its average to
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