BUS 207 Lecture Notes - Lecture 4: Fixed Cost, Production Function

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 207
• Professor: Karen Ruckman

Document Summary

Q1: why is apple inc vertically integrated? (hint: governance structure) Q2: explain under what circumstances, a hold up problem will exist. Q3: suppose xyz contracts to buy from abc 1 million units of a widget at each. Abc needs to build a new factory to produce the 1 million units, the cost of the factory is ,500,000 and the unit cost of a widget is . If the local population increase from 130,000 to 140,000. What is the predicted changed in ticket sales: the current price is . 50. If ep is -0. 85, predict the percentage change in tickets if price is raised to . 50. Suppose a manufacturer has the following production function: The market price for each production unit is . Labor (l) and the rate is per capital (k). a) If the firm wants to produce 3000 units, what is the optimal combination of. For good a, p= , avc=. 40, and qa=50,000 units.