Marginal cost, Managerial Economics

A firm in a perfectly competitive market invents a new situation of production that lowers its marginal costs.  What happens to its output? What happens to the price it charges? 

a. The firm has an employee who threatens to tell all other firms in the industry about how to execute this new method. Will it be possible to bribe the employee not to do this? Describe why or why not.

b. Why should this employee probably took to tell only some of the other firms rather than all of them?

 

Posted Date: 3/25/2013 6:10:10 AM | Location : United States







Related Discussions:- Marginal cost, Assignment Help, Ask Question on Marginal cost, Get Answer, Expert's Help, Marginal cost Discussions

Write discussion on Marginal cost
Your posts are moderated
Related Questions
Equilibrium in a two commodity market Let us consider a two-commodity market model in which the two commodities are related to each other.  Let us assume the functions for bot

briefly explain oppurtunity cost in decision making?


How Hospital administrator use concept of managerial economics Hospital administrator can use tools and concepts of managerial economics to determine the optimal allocation of

State the difficulties in the measurement of profit.


No new substitutes for the commodity If some new substitutes for a commodity appear in the market, its demand normally declines. This is quite natural, since with the availabil

Q. Production Planning in demand forecast period ? Long term production planning can assist the management in organising long term finances on practical terms and conditions. S

Mankiw Model of Nominal Rigidities   There are two related reasons for which  firms do not  frequently change prices. First, as we saw in the discussion on menu costs, the cost

Q. Proportion of Income Spent on a Commodity? Another characteristic that has an impact on the elasticity of demand for a commodity is proportion of income that consumers use u