Economics — Assignment on Costs
Question 1. The president of a small Firm has been complaining to the controller about rising labor and material costs. However the controller notes Mat the average costs have not increased during the past year. Is impossible?
Question 2: A local entrepreneur who has been running a profitable business for many years recently purchased a three-way liquor license. This license. Gives the owner the legal right to sell beers, wine, and spirits in her restaurant. The cost of obtaining the three way license was about $75,000, since only 300 such licenses are issued by the stale. While the license is transferable, only $65,000,. is refundable. if the owner chooses not to use the license. Alter selling alcoholic beverages for about a year, The restaurant came to the realization that she was losing dinner customers and her profitable restaurant was turning into noisy, unprofitable bar. Subsequently, she spent alum $6.000 placing advertisement in various newspapers and restaurants magazines across the state offering to sell the license for $70,000, After a long wait, she finally received one after to purchase her license for $66,000. What is your opinion for restaurateur’s, decision, Would you recommend that she accept $66,000 offer?
Question 3, If Boeing produces 9 jets per month, its long-run total cost is S9 million per month. If produces 10 jets per month, its long run total cost is $9.5 million per month. Does Boeing exhibit economies or diseconomies of scale in producing jets.