U.S. furniture Economics Assingment Help With Solution

U.S. furniture Economics Assingment Help With Solution

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1.Chapter 7, Technical Questions 3 and 5 in the textbook.

3. The following graph shows the cost curves for a perfectly competitive firm. Identify the shutdown point, the breakeven point, and the firm’s shortrun supply curve.
 
5. Draw graphs showing a perfectly competitive firm and industry in long-run equilibrium.
 
a. How do you know that the industry is in longrun equilibrium?
 
b. Suppose that there is an increase in demand for this product. Show and explain the short-run adjustment process for both the firm and the industry.
 
c. Show and explain the long-run adjustment process for both the firm and the industry. What will happen to the number of firms in the new long-run equilibrium?
 
2.Chapter 7, Application Questions 3 and 5 in the textbook.
 
3. The following facts characterize the furniture industry in the United States:39
 
a. The industry has been very fragmented, so that few companies have the financial backing to make heavy investments in new technology and equipment.
 
 

 
b. In 1998, only three U.S. furniture manufacturers had annual sales exceeding $1 billion. These firms accounted for only 20 percent of the market share, with the remainder split among 1,000 other manufacturers.
 
c. Capital spending at one manufacturer, Furniture Brands, was only 2.2 percent of sales compared with 6.6 percent at Ford Motor Company. Outdated, labor-intensive production techniques were still being used by many firms.
 
d. Furniture manufacturing involves a huge number of options to satisfy consumer preferences, but this extensive set of choices slows production and raises costs.
 
e. Small competitors can enter the industry because large manufacturers have not built up any overwhelming advantage in efficiency.
 
f. The American Furniture Manufacturers Association has prepared a public relations campaign to “encourage consumers to part with more of their disposable income on furniture.”
 
g. In fall 2003, a group of 28 U.S. furniture manufacturers asked the U.S. government to impose antidumping trade duties on Chinese-made bedroom furniture, alleging unfair pricing.
 
h. The globalization of the furniture industry since the 1980s has resulted from technological innovations, governmental implementation of economic development strategies and regulatory regimes that favor global investment and trade, and the emergence of furniture manufacturers and retailers with a capacity to develop global production and distribution networks. The development of global production networks using Chinese subcontractors has accelerated globalization in recent years.
 
Discuss how these facts are consistent with the model of perfect competition.
 
3.Chapter 8, Technical Questions 3 and 7 in the textbook.
 
3. Suppose the demand curve for a monopolist is QD = 500 − P, and the marginal revenue function is MR = 500 − 2Q. The monopolist has a constant marginal and average total cost of $50 per unit.
 
a. Find the monopolist’s profit-maximizing output and price.
 
b. Calculate the monopolist’s profit.
 
c. What is the Lerner Index for this industry?
 
7. The following graph shows a firm in a monopolistically competitive industry.

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