Description
Please do worksheet.
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Production
ECO 365
Labor Demand
Use the information below to answer the questions.
The table below represents a production schedule for Quincy’s Quiche Corner, a restaurant in a mall that
sells quiches, priced at $3 each (P = $3). Total Revenue (TR) equals price multiplied by the number of
quiches produced per hour.
Employees are primarily high school students with virtually identical skills as quiche makers, and they are
paid a wage rate of $8.00 per hour (W = $8). Labor costs equal the wage rate multiplied by the number of
workers employed per hour.
Quincy’s has total fixed cost (TFC) equal to $18 per hour.
Total cost (TC) is equal to labor costs plus TFC. Profit is equal to Total Revenue minus Total Cost
Assume Quincy’s operates in a perfectly competitive environment (in both input and output markets).
Fill in the missing values in the table.
Number of Workers Output (quiches per hour) Marginal Product
Value of Marginal Product
0
0
1
10
10
$30
2
18
_____
$24
3
24
6
_____
4
28
_____
$12
5
30
_____
_____
Does marginal product increase or decrease as additional workers are hired? ______________
If the firm follows the profit-maximizing rule, hiring additional workers as long as the value of marginal
product exceeds the wage rate, how many workers will the firm hire? __________
Calculate the firm’s hourly revenue, total cost, and profit, assuming it follows the profit-maximizing rule:
TR = ________
TC = ________
Profit = ________
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Explanation & Answer
Attached.
Number of workers
Output(quinches per hour)
0
1
2
3
4
5
0
10
18
24
28
30
Marginal product
10
8
6
4
2
Does marginal product...
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MC
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Understand economic terminology and economic definitions pertaining to decisions made by managers.
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Competencies
Understand economic terminology and economic definitions pertaining to decisions made by managers.
Explain and demonstrate knowledge of concepts including the supply/demand relationship, price ceilings and floors, and market surpluses and shortages.
Elasticity, consumer choice, utility, productivity, and nature of costs.
Demonstrate how economic theory contributes to strategic managerial decision-making.
Understand various market structures and impacts upon firms, consumers, and government policies.
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Course Scenario
Oil Company X is a large oil refinery which has been expanding and taking on new investment projects. Recently, they have considered building a pipeline that stretches across the United States, from Canada to New Orleans.
As a cost analyst at Oil Company X, submit a proposal to the board of the company critiquing the costs and benefits of building a new oil pipeline that stands to generate copious amounts of revenue. Include in your report the following: expected changes to supply and demand, a cost analysis of the project, the cross-price elasticity of an alternative energy source, cost curves, the new expected profit-maximizing quantity and price of oil after completion, a risk assessment evaluating liabilities from potential environmental damage, and a final recommendation.
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Use the Excel document below to complete the assignment, and submit it to the Drop Box when finished. Student Excel Spreadsheet
As an economic analyst at your firm, you are being asked to evaluate this investment opportunity and submit a 5-page proposal as a Word document.
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TFC
TVC
ATC
AVC
MC
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You will also include graphs to show new expected profit-maximizing quantity and price of oil after completion. After determining the profit-maximizing price and quantity, as well as the corresponding average variable cost, determine the expected total profit for the 15-year duration the pipeline will be in operation.
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******* Walmart is the company*******a) Describe the trends of two previously selected company performance variables (e.g. ...
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