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Production plans
You manage a U.S. based company that makes shoe laces that you sell in a highly competitive market (your shoe laces are considered a standardized commodity by your customers). Your marketing staff predicts that in the upcoming year overall industry supply will fall by at least 4% because some of your U.S. competitors cannot continue to compete with foreign suppliers, but market demand will rise at least 2%. How, if at all, should you alter your production plans for the coming year?
Explain how do you solve for a, b, c, e in the equations: Qd = a-bW and Qs = c+eW when you know the equilibrium wage (or price) is $4, there are 100,000 people employed, Elasticity of demand is equal to -0.4 and Elasticity of supply is equal to 0...
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Tom earns $15 per hour for up to 40 hours of work each week. he is paid $30 per hour for every hour in excess of 40.
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