1) Suppose that in the clothing market, production costs have fallen, but the equilibrium price and quantity purchased have both increased. Based on this information you can conclude that A. the supply of clothing has grown faster than the demand for clothing B. demand for clothing has grown faster than the supply of clothing C. the supply of and demand for clothing have grown by the same proportion D. there is no way to determine what has happened to supply and demand with this information eco 561 final exam answers for free 2) Camille's Creations and Julia's Jewels both sell beads in a competitive market. If at the market price of $5, both are running out of beads to sell (they can't keep up with the quantity demanded at that price), then we would expect both Camille's and Julia's to: A. raise their price and reduce their quantity supplied B. raise their price and increase their quantity supplied C. lower their price and reduce their quantity supplied D. lower their price and increase their quantity supplied 3) In which of the following industries are economies of scale exhausted at relatively low levels of output? A. Aircraft production B.
Aircraft production B. Automobile manufacturing C. Concrete mixing D. Newspaper printing Want more details? Download now ECO 561 Final Exam Answers 4) The average cost curves (AVC and ATC) should be minimized A. where MC = ATC and MC = AVC B. where FC = ATC and FC = AVC C. where TC starts to increase at a faster rate D. where ATC = AVC 5) If the wage rate increases, A. a purely competitive producer will hire less labour, but an imperfectly competitive producer will not B. an imperfectly competitive producer will hire less labour, but a purely competitive producer will not C. a purely competitive and an imperfectly competitive producer will both hire less labour D. an
By doing this firms can lower prices and sell more product or maintain higher profit margins- all good for the bottom line. In the fashion markets today, fashion trends are constantly changing fast. Poor trend forecasting or slowing of unsold inventories will cause product to be marked down or written off, which create cost-cutting measures to be implemented. The downside to the conventional wisdom method is in order to have the lowest cost, contracted firms may ignore environmental concerns, employ child labor, withhold on safety and engage in other ghastly practices. 2.
Based on the book when there are competitive markets such as airlines, a company certainly needs to look at costs and revenue very closely. (Brickley, Smith, & Zimmerman, 2009, p. 180) In this case I believe that the flights from San Francisco t Washington DC should be discontinued. Even though United Airlines is a large company and profitable if they continue these flights in the long run they will lose money. The other option that they would have would be to increase the fares to cover those costs, but since the airline industry is a competitive market people are more likely to go with a lower cost airline. The first thing the airline must do is look at the firm supply.
The chart shows that machine-spun yarn became of greater quantities as opposed to hand-spun yarn due to the increase in machines. Also this document shows how the amount of machine-made cloth is quickly catching the amount of hand-woven cloth. (Document 6) “The Indian economist” in 1996 talks of how handwoven cloth makers cannot compete with the machine made cloth makers, and is thusly rapidly declining. This shows India’s step towards a more mechanized cloth industry. Now we can compare Japan’s chart of cotton yarn (Document 2) with India’s cloth textiles.
Externalities cause deadweight loss which can lead to market failure. Businesses can make more money if they can internalize the externalities. Externalities can be internalized if the transaction cost of the business is low. “Transaction costs are the costs of identifying and bringing buyers and sellers together, bargaining and drawing up a contract”2and it is relatively high for department stores like Galeria Kaufhof in comparison to stores like H&M. Similarly, the transaction cost for stores such as H&M is more than that of the jewelry shops but less than the department stores.
However, this may also go against them because without stores there sales will be lower than they could be if they did own shops. The website also helps to increase sales revenue as it is bright and eye-catching that could encourage people to buy their products. The website also helps to increase sales revenue as the delivery service offers free global shipping, which could increase sales exponentially. However, this does have exceptions as it does not deliver to some countries. ASOS also add 1790 new clothing lines a week and already have 50,000.
A growth company tends to have very profitable reinvestment opportunities for its own retained earnings. Economic growth will affect Etisalat as it would increase their profits due to more people wanting more products and wanting to spend their money. As people have more money to spend on luxuries instead of the essentials it means that the higher value products will be brought. For example the Andrex toilet rolls will be brought instead of Etisalat value, because of this it means more money is being spent in the store which is an advantage for Etisalat. Recession occurs when people involved in business become more cautious and: * Customers cut back on spending, and start to save more * Manufactures and sellers cut back on their orders, produce fewer goods and start to cut back costs in general, including by laying off workers.
However, it is important to recognise that the competition in luxury fashion is not based on price but rather on image perception and brand value and quality. It could be argued that competitive rivalry is slightly lower in emerging markets because of their recent development and the slower entrance of key players in this industry. Potentially, this can be offset by the competition of local fashion retailer. Bargaining Power of Buyers Luxury brands have all individual consumers to sell to globally but also in a given country. However, due to the higher prices, there is a certain segment to which these brands can appeal to – this strengthens the power of the buyers.
Due to the fact that Asian and other foreign textile manufacturers have been exported aggressively and consumer preferences are requiring higher-quality products with minimum defects, like other firms, Aurora tends to produce small amount of yarns produced with minimal period and provide to customized markets. Consequently, Aurora had decreased significantly its costs by reducing $3.9 million of SG&A expenses since 2000 and it was one reason of increasing operating profit and net earnings in 2002. Unfortunately, Aurora’s returned amount from retailers had been increased and the proportion of sales return of Aurora’s one plant named the Hunter reached 1.5% in 2002; thus, the firm’s income has not risen well. Figure 1 illustrates Aurora’s financial ratios by calculating given financial information through Exhibits 1, 2, and 6. The first, the company’s liquidity ratios-current ratio and quick ratio-had been increased smoothly for these four years.