Market for plastic toothpicks most closely resembles

Assignment Help Business Economics

Reference no: EM131101225

Pick Industries produces plastic toothpicks that it sells to distributors in the Southwest. During the early 1990s, the price of the plastic it uses to produce toothpicks fell by 46 percent, due to a local glut of recycled plastic containers. Assuming that the market for plastic toothpicks most closely resembles that of perfect competition and that other firms in the industry do not experience similar cost savings in the short run, what impact would this have on the profit-maximizing output, price, and profits of Pick Industries?

Reference no: EM131101225

Questions Cloud

Equilibrium strategies of two firms under the assumption : Let the inverse demand curve be p(q) = a − bq. Suppose there are two firms, with constant marginal cost equal to C. What are the equilibrium strategies of the two firms under the assumption the entire market is served.

Employing constant rate of growth forecasting model : Fred’s Hardware and Hobby House expects its sales to increase at a constant rate of 8 percent per year over the next three years. Current sales are $100,000. Forecast sales for each of the next three years. What are some of the hazards of employing a..

Determine the capitalized cost for each design : Two incinerators are being considered by a waste management company. Design A has an initial cost of $2,650,000, has annual operating and maintenance costs of $750,000, and requires overhauls every 5 years at a cost of $1,375,000. Using a 6.5 %/year ..

Offset the trade-diversion cost : The Netherlands is about to join Denmark in a free trade area. Before the union, The Netherlands imports 10 million DVD recorders from the rest of the world at $100 and adds a tariff of $30 on each recorder. It takes $110 to produce a DVD recorder in..

Market for plastic toothpicks most closely resembles : Pick Industries produces plastic toothpicks that it sells to distributors in the Southwest. During the early 1990s, the price of the plastic it uses to produce toothpicks fell by 46 percent, due to a local glut of recycled plastic containers. what im..

Without taking into account expected environmental damage : Mena would like to build a dam in the Grand Canyon of Western US to provide electricity to the nearby urban area of Las Vegas. Suppose the dam costs $800 million to build and is expected to generate $150 million of annual electricity production forev..

Replacement plotter with new internet-based : Herald Richter and Associates, 5 years ago, purchased for $45,000 a microwave signal graphical plotter for corrosion detection in concrete structures. It is expected to have the market values and annual operating costs shown below for its remaining u..

Two firms exhibiting cournot behavior have proposed to merge : Two firms exhibiting Cournot behavior have proposed to merge. The resulting firm would account for about fifty percent of the market. It is widely expected that the price will rise as a result of the merger. The firms claim that the merger is in soci..

User Account

All Pages