Assignment:
McDonald's signs say that there are billions and billions served. It has many competitors who are all vying to knock it from its perch atop the fast-food industry. Please explain three basic strategies that McDonald's can use to keep it ahead of its competitors. Please give an example of how McDonald's could utilize each.
Quality Metalcraft is a company in Michigan that makes prototype parts for GM and Ford. The QMC manager is putting together a Request for Proposal (RFP).
A) You have been asked by this manager to determine the break-even price for 4 runs (400 units--each run is 100 parts). What is it?
B) If GM likes the parts, they may extend the contract by 1 or 2 more runs. What is the break-even point for the 5th and 6th runs?
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Quantity
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Marginal Cost per run
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Total Cost per run
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Average Cost per run
|
|
1 run
|
$64
|
$64
|
$64
|
|
2 run
|
$58
|
$122
|
$61
|
|
3 runs
|
$52
|
$174
|
$58
|
|
4 runs
|
$46
|
$220
|
$55
|
|
5 runs
|
$40
|
$260
|
$52
|
|
6 runs
|
$34
|
$294
|
$49
|
Not too long ago a museum raised the prices on the lunches it sold in its cafe. At first the revenues for the cafe increased, but then after a few months, the revenues dropped below what it was originally making. Using the concepts of elasticity, and the long and short-runs, please give an economic explanation of what happened.
The US has a National Debt that exceeds $22 trillion and a budget deficit that is close to a trillion dollars. If US decides to cover the budget deficit through money creation (which leads to inflation and dollar depreciation), what are the impacts on:
A) Domestic firms that use 100% domestic content and export their products,
B) Domestic firms that use less than 100% domestic content that sell exclusively in the US, and
C) The consumers who buy goods that have less than 100% domestic content?
Across the US, the price of gasoline has been increases during the Spring and Summer months, but then decreases during the Fall and Winter months.
A) Please provide a demand-side explanation for these price movements.
B) Please provide a supply-side explanation for these price movements.
C) What piece of information would help you to determine which factor played a more significant role?