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Taking example to explain, suppose A and B both operate a single proprietorship a bakery that produces wedding cakes. And they both have identical fixed costs. A is much better at making cakes than B, as she learned to bake and some additional tricks in cooking classes and, as a result, has lower average variable and average total costs. It is given that A and B sell their cakes at the same price, A appears to have higher profits than B. We say “appears” because A’s implicit opportunity cost has to be adjusted to reflect the higher pay she could receive if he were to work for someone else making cakes. Once this is done, her variable costs will be the same as b’s, and he will not be making any economic profits. This does not say that a will not be making more dollars than B, only that these “more dollars” are not profits. They are a payment to A’s superior skill at making cakes and without this superior skill, this extra income would not exist.
Explain why one firm sometimes appears to be earning higher profits than another but, in reality,...
Earning higher and higher profits each year is another one of the Federal Reserve Banks main monetary policy responsibilities ? Earning higher and higher profits each year is another one of the Federal Reserve Bank's main monetary policy responsibities. 4 True or False 04:13:46 True False
Explain why you sometimes hear tones that were higher in frequency than the fundamental.
(c) Firms in the perfectly competitive bubble tea industry are earning economic profits because of a surge in demand for bubble tea. Explain why in the long run, economic profits in this scenario are of less concern, from a public welfare perspective, than economic profits from monopoly. (5 marks)
47. Why must profits be zero in long-run competitive equilibrium a. If profits are not zero, firms will produce higher-quality goods. b. If profits are not zero, marginal revenue will rise. c. If profits are not zero, marginal cost will rise. d. If profits are not zero, firms will enter or exit the industry. 48. Resource allocative efficiency occurs when a firm a. minimizes costs of production yet charges the highest possible price. b. produces the quantity of output at...
. Show how a leveraged bank can make higher profits during a boom than an unleveraged firm. Then, show how a leveraged bank can lose much more of its capital during a recession than an unleveraged bank.
Explain the reticulocyte production index and why it is why it is sometimes necessary to use rather than the raw retic count.
use a diagram to explain why Ha appears more downfield than Hb or Hc in the 1H NMR. Acetophenone H: 87.94 ppm Hb: 87.40 ppm H.: 87.40 ppm
8. a. Explain why the melting point of pure phthalic acid is higher than that of pure napthalene, when the two compounds have nearly the same molecular weight. b. Explain why the melting point of pure hexane is hgiher than that of pure cyclo-hexane, when the two compounds have nearly the same molecular weight. (Hint: reffer to structures)
Explain the cost curves of the firm. In terms of economies of scale, why would a firm sometimes want to expand output and sometimes not want to expand output?
Explain why acetic acid has a higher boiling point than ethyl alcohol ?