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Apple Computer's cost to produce the components, the headphones and the packaging it ships in comes to $21.77 for the iPod shuffle. That's about 28% of the device's retail price of $79.
a. Is Apple making $57 profit per shuffle? If not, explain Apple's other costs in terms of fixed and variable costs (give examples).
b. If Apple reduced its price for the shuffle, what do you think would happen to their profit? What impact would the price decrease have on their competitors? Explain by considering the elasticity of shuffles).
What is the long-run equilibrium price in this market? Explain intuitively, in your own words, why this is the long-run equilibrium. What is the long-run market equilibrium quantity?
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Distinguish between explicit & implicit costs, giving example of each and what are the explicit & implicit costs of attending college?? Why does the economist classify normal profit as a cost?
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Now suppose that x 2 is also free to vary. Derive the demands for the inputs and the long-run cost function of the firm - Draw the two cost functions on the graph. Do they cross? Which one lies higher?
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Questions: : Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month? Explain your choice.
Assume that a union's target is to maximize total wage income received by union workers, namely, the average union wage times the number of union workers employed.
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