Question
In: Economics
Cost and Industry structure
Automobile manufacturing is an industry subject to significant economies of scale. Suppose there are four domestic auto manufacturers, but the demand for domestic autos is no more than 2.5 times the quantity produced at the bottom of the long-run average cost curve. What do you expect will happen to the domestic auto industry in the long run?
Solutions
Expert Solution
This is the same scenario that happened in the United States in the 1970s. You would expect one firm will not survive in the long run because there is only demand that is enough for 2.5 firms to get to the bottom of the average cost curve. At least one firm will be struggling.
One firm will not survive in the long run and at least one firm will be struggling.
Joes answered 3 years agoRelated Solutions
The market structure of an industry is determined by: a. the ownership structure of firms. b....
The market structure of an industry is determined by:
a. the ownership structure of firms.
b. learning by doing.
c. minimum efficient scale relative to industry demand.
d. differences in the quality of managers across industries.
Match the industry structure to the description. - A. B....
Match the industry structure to the description.
- A.
B. C.
D.
Price = Marginal Cost = Marginal Revenue = Average Total Cost,
and Profit = 0
- A.
B. C.
D.
Many, many firms, all of which must charge the given market
price
- A.
B. C.
...
Assume a perfectly competitive firms cost structure is given by the table above, and that the market price in this industry is $58.
QuantityTotal Cost0100110221163154422853506532778681124Use the table above to answer the following question.Assume a perfectly competitive firms cost structure is given by
the table above, and that the market price in this industry is $58.
If the firm is profit maximizing, how much should they produce?
What is the oligopoly market structure of the music industry?
What is the oligopoly market structure of the music
industry?
Discuss the structure, conduct and performance of the pharmaceutical industry. How does its structure, conduct and...
Discuss the structure, conduct and performance of the
pharmaceutical industry. How does its structure, conduct and
performance impact patients? Given the structure, conduct and
performance of the pharmaceutical industry, predict the
responsiveness of the industry to a common disease as compared to a
very rare disease. Assume both diseases have very similar impacts
on patients.
Discuss the structure, conduct and performance of the pharmaceutical industry. How does its structure, conduct and...
Discuss the structure, conduct and performance of the
pharmaceutical industry. How does its structure, conduct and
performance impact patients? Given the structure, conduct and
performance of the pharmaceutical industry, predict the
responsiveness of the industry to a common disease as compared to a
very rare disease. Assume both diseases have very similar impacts
on patients.
Oil & Gas Industry 1.Given the Larger Environment and Industry Structure, Your Prediction of what the...
Oil & Gas Industry
1.Given the Larger Environment and Industry Structure, Your
Prediction of what the Industry will look like in 10 years from
today.
------ Strategic Management Course , MBA
how does Costs and industry structure benefit harley davidson
how does Costs and industry structure benefit harley
davidson
industries below high-profit industry and a low-profit industry. From what you know of the structure of...
industries below high-profit industry and a low-profit industry.
From what you know of the structure of your selected industry, use
the five forces framework to explain why profitability has been
high in one industry and low in the other.
High profit : Pharmaceuticals Low profit :Entertainment
1 Bargaining power of customers
2 Bargaining power of suppliers
3 Threat of new entrants
4 Threat of substitute products
5 competitive rivalry
What is meant by “cost structure?” Explain how a company's cost structure affects its break-even point....
What is meant by “cost structure?” Explain how a company's cost
structure affects its break-even point. In your opinion, what is
the best level of cost structure? Explain
J. P. Alexander claims that the relevant range concept is
important only for variable costs. Explain the relevant range
concept. Do you agree with J. P.'s claim? Explain
What are the principal differences between activity-based
costing (ABC) and traditional product costing? Which is the
preferred method? Explain.
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Prepare ONE Page reflection to the readings of the Perceptual Process incorporating as well one outside...
- How is the internet affecting our everyday life? I just need a rough draft for this...
- Please explain your view of the most difficult aspect of Customs Compliance?
- You are required to write an interactive program that prompts the user for seven (7) real...
- Describe in detail the five-forces model of industry competition. What causes each of the forces to...
- Java Programming. I'm writing this in an IDE called Eclipse. If you could also use comments...
- Scenario: You are a departmental manager in a large community hospital in an urban area. Your...
ADVERTISEMENT