Please give replies for the peer comments:
1) I found chapter 22 very interesting, and I think the reason why is because I am a planner. It said in the book that the short run can vary in length of time depending upon the type of industry it is and how many variables are involved. The example used noted that a fast food chain could have a 4 month time period to be able to evaluate the short run. However a firm selling products may have a longer short run period due to the time it takes to see results.
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I am curious if there is an average short run time length. I am also curious how professional services (lawyers, CPA’s, etc) look at the short term versus long therm. It seems they would be similar to the fast food restaurant example based on less fixed costs.
2) This week topics are very interesting to provide insight into the various concepts.
In Chapter 22, it provides effective information about the relationship between diminishing marginal product and cost curves, what are the short-run costs to a company, why the long-run average cost of curve is formed or seems like “U” alphabet, diminishing the marginal product and short-run vs long-run costs. The concept that I found interesting is the long-run average cost curve is U-shaped because, it projects economies of scale and diseconomies of scale and illustrate the constant returns to scale. Why organizations should receive various inputs? What is the significance of blending these inputs in using the technological production process ends up with the output?
The Chapter 23 helped to understand the concept of perfect competition and how it influences the economic power of country. This chapter discusses about the characteristics of perfect competitive markets, determination of profit maximizing rate of the production with the help of conducting marginal analysis, long-run equilibrium, supply curve for the perfect competitive industry in the nation, and price determination under the perfect competition. It’s interesting to know why a perfect competitor considered as price taker. Is it required to accept the price as given by perfect competitor? Why a perfect competitor or perfectly competitive organization will allow ensure either economic profits or losses when it is considering the result in short-run?
The concept of monopoly is very interesting. In my opinion, the monopoly in operating business shows a huge impact on the country’s economic condition (Miller, 2014). From the Chapter 24, I am aware of barriers to entry, process of calculating monopoly profit, cost of monopoly profit maximization, elasticity and monopoly, and the demand curve a monopolist expression. Is the tax on imported goods has a negative influence on the firm in what situations? It is reasonable? If the monopolistic produce more products and sell at higher cost what impact might be face?
3) Price taker – why a perfect competitor is a price taker. I thought price taker was interesting. Price takers are sellers in a perfectly competitive market. A competitive market means that there are a lot of companies that sell the same product. If a company rise the price, consumers will easily find another company, losing all profits. Therefore, a company cannot control the price in a competitive market, it has to take the market price.
After reading chapters 25-27, please share your thoughts regarding the material. This may include:
- Questions you may have regarding information covered in the chapters
- Information you found interesting
- Your opinion regarding the information