Lumber companies are not profit maximizers

Assignment Help Microeconomics
Reference no: EM132478728

In December 1998, after a year in which Asian demand for B.C. lumber had fallen dramatically, an article in The Globe and Mail had the following headline: "Drastic Cost Reductions Needed to Save 13 B.C. Sawmills".

a) Does this headline suggest that B.C. lumber companies are not profit maximizers?

b) If short-run unit costs are "too high", what is stopping the lumber companies from simply moving along their long-run average cost curve to a more efficient level?

Reference no: EM132478728

Questions Cloud

How are data and information systems categorized : How does the NIST risk management framework 3-tiers ensure information security (NIST SP 800-53, revision 4)? How are data and information systems categorized?
How many full-time workers should it hire at what wage rate : a) If Pure Fizz wishes to maximize its profit, how many full-time workers should it hire at what wage rate?
Compute the company CM ratio : Compute the company's CM ratio and its break-even point in unit sales and dollar sales. Compute the new CM ratio and the new break-even point
Draw a supply and demand diagram for the corn market : Draw a supply and demand diagram for the Corn market showing this equilibrium.
Lumber companies are not profit maximizers : a) Does this headline suggest that B.C. lumber companies are not profit maximizers?
What are the advantages of using the papa model : How does scenario analysis as described in this case help an organization to prepare for uncertainties? What are the advantages of using the PAPA model to.
What was the balance in supplies on january : If $1,740 was received in January for services performed in January, what was the balance in Unearned Service Revenue at December 31, 2019?
What effect this harvest will have on canadian wheat farmers : Explain using a diagram what effect this harvest will have on Canadian wheat farmers?
Calculate the the new common stock value : The company's reorganization value is $9,750,000. Assuming the reorganization plan qualifies for fresh start reporting, the new common stock will be valued at

Reviews

Write a Review

Microeconomics Questions & Answers

  What is firms cost of capital after taxes with a tax rate

A firm's stockholders expect a 15 percent rate of return, and there is a $22 M in common stock and retained earnings. The firm has $9M in loans at an average rate of 7 percent. The firm has raised $14M by selling bonds at an average rate of 5 percent..

  The appropriate letter code in the spaces provided

Match the statements below with the appropriate terms by entering the appropriate letter code in the spaces provided. TERMS:      A.   Prepaid Expenses

  At what price will the firm shut down in the short run

Suppose the figure to the right illustrates the short-run cost curves for a firm in a perfectly competitive market. Let MC be the marginal cost curve.

  What is the most that any farmer would pay to rent

Question 1: What is the most that any farmer would pay to rent your 20 acres? Question 2: What if the price of wheat rolls to six dollars per bushel?

  Do you think the fasb made the correct decision

Do you think the FASB made the correct decision in requiring consolidated financial statements to recognize all subsidiary's assets and liabilities at fair value regardless of the percentage ownership acquired by the parent?

  Does the production function exhibits increasing returns to

Suppose the production function is C = L(0.5) x M(0.75), does the production function exhibits increasing returns to scale, decreasing returns to scale or constant returns to scale? Explain your answer.

  Under what situations will firm shut down operations in

under what conditions will a firm shut down operations in the short run? identify an example you are familiar with or

  State at least three advantages of waveguide

State at least three advantages of waveguide resonant cavities over two wire resonant sections.

  Create a pro-price control and an anti-price control

So, knowing what you know now about price controls, are you in favor of setting a $2 per gallon price ceiling on gasoline?

  How might you have done the appraisal differently

How might you have done the appraisal differently if you could? Did evaluation help you to improve your performance, hinder your performance, or have no effect?

  Find the firm optimal output

Find the firm's optimal quantity, price, and profit (1) by using the profit and marginal profit equations and (2) by setting MR equal to MC. Also provide a graph of MR and MC.

  Use a graphical illustration to describe briefly what the

use a graphical illustration to describe briefly what the influence of each of the following would be on the market

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd