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At a recent board meeting, the president and CEO got into a heated argument about whether to shut down the firm’s plant in Miami. The Miami plant currently loses $60,000 monthly. The president of the firm argued that the Miami plant should continue to operate, at least until a buyer is found for the production facility. The president’s argument was based on the fact that the Miami plant’s fixed costs are $68,000 per month. The CEO exploded over this point, castigating the president for considering fixed costs in making the shutdown decision. According to the CEO, “Everyone knows fixed cost don’t matter!”
a) Should the Miami plant be closed or continue to operate at a loss in short run?
b) How would you explain to the incorrect party that he or she is wrong?
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Proide that the economy grows is allowed to grow through the banking system and the creation of money through lending.
Many people find the current unemployment figures for Australia at 5.5% unbelievable. Why is this? Why might the official statistics be inaccurate
The CEO of a major automaker overheard one of its division managers make the following statement regarding the firms's production plans:
General Electric had some managerial changes due to patterns of change reflective of it production of Generators and Compressor & Motors. What was the market model used during that time, monopoly or oligopoly or another
In a simple economy assume that all income is either compensation of employees or profits. Suppose also that there are no indirect taxes. Compute gross domestic product from the following set of numbers.
You are given the following information about the personal computer (PC) industry: Find the NRP and the ERP. Show all calculations and formulas.
Over the course of product life cycle, as the firm moves through the sequence of oligopoly, monopolistic competition, monopoly, and pure competition, the profit opportunities diminish.
Project the effect of national economic conditions regarding trade and specialization business decisions.
Compute the producer surplus from parts a and b. Are producers better or worse off as a result of international trade? Discuss why.
Demonstrate each of the following events by a production possibility frontier graph, and examine what the effects of it were on economic growth;
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