ADMS 1010 Lecture Notes - Lecture 3: Resource-Based View, Moaz, Strategic Management
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11)
A constant-cost, perfectly competitive industry experiences a permanent increase in demand. In adjusting to this change, what will happen to the price of the product?
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It will increase in the short-run and then decrease in the long-run, but end up above its original level in the long-run. |
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It will increase in the short-run and then increase further in the long-run. |
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It will increase in the short-run and then decrease back to its original level in the long-run. |
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It will increase in the short-run and then decrease below its original level in the long-run. |
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It will decrease in the short-run but return to its original level in the long-run. |
12)
Assume that a perfectly competitive firm owns or rents a higher-quality resource that results in lower average total costs and higher economic profits in the short run. What will happen in the long-run?
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The price of the higher-quality resource will be bid upward resulting in economic rents and equalizing costs across firms. |
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New firms will enter and compete with any excess profits away. |
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None of the other answers is correct. |
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The government will tax away any excess profits. |
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The firm with the higher-quality resource will earn positive economic profits in the long run. |
13)
Which of the following are characteristics of long-run equilibrium?
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No firm has an incentive to change its level of output. |
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No firm has an incentive to change its plant size. |
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Economic profit is zero |
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All of the above |
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None of the above |
14)
Which of the following statements is consistent with the textbookĆ¢ĀĀs analysis of perfect competition?
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Although individual perfectly competitive firms wonĆ¢ĀĀt pay to advertise, the industry as a whole may well advertise. |
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Higher costs for one firm in the industry will result in that firm charging a higher price than the other firms in the industry. |
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If all the firms in an industry charge an identical price for their products, this is clear evidence of collusive behavior. |
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All of the above |
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None of the above |
15)
The assumptions that define the market structure known as monopoly include which of the following?
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High barriers to entry. |
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There is one seller. |
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There are no close substitutes available. |
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All of the above |
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None of the above |
Major Communication Company - Resource Usefrom CSR Report | |||
Usage | Unit | Cost | |
Electricity | 1,521,000,000 | kWh | $ 333,099 |
Water | 607,665,870 | gallons | $ 911,499 |
Waste | 11,056,169 | pounds | $ 663,370 |
GHG | 55,811 | pounds | $ 613,921 |
Your boss believes that energy prices have gotten as high asthey are going to go. He thinks that the carbon market is filledwith extra carbon credits and that prices will probably drop beforefuture regulation. He also doesn't see waste as something materialenough to pay attention to. He assumes that electricity prices willstay the same. Water prices will likely increase 33% because ofdrought. He thinks GHG emissions and costs will actually decreaseby 50% because of the glut of credits on the market, and he assumeswaste will also be the same.
Question 1: Given the information below, andthe assumptions above, calculate what the assumed total annualcosts will be for this company's resource use. Round to the nearestwhole number.
a. | $ 3,356,322 | |
b. | $ 2,515,723 | |
c. | $ 1,334,057 | |
d. | $ 998,956 |
Your boss doesn't put a lot of weight into climate change andits affect on business. However, you think that it'd be wise to dosome modeling because you think that with the drought inCalifornia, economic slowdown in China and increased attention toenvironmentalism because of the Paris UN Summit on Climate Change,that you think there will be higher costs related to resource usefor the company.
Model for your boss what a dramatic increase could be next yearif GHG credits were double what they are today, and if water isforty percent higher. Assume that electricity will actually go down20% with the competition that solar and wind are both creatingwithin the market, and the waste just going up a measly 1% becauseof inflation.
Question2 : Given the information below, andthe assumptions above, calculate what the assumed total annualcosts will be for this company's resource use. Round to the nearestwhole number.
a.$3,440,424
b. $4,983,424
C.$2,998,554
D. $2,946,216
Your boss understands that the company needs to start beingproactive around climate and the effects it will have on business.Therefore, she has moved to a purchasing agreement with the utilityto buy 100% renewable energy. This accounts for 75% of thecompany's total GHG emissions, so emissions should go down by thatsame amount. But the kicker is that electricity will go up 10%. Shealso sees the need for massive water conservation. The governmenthas already begun rationing water to farms and homes, therefore sheinstitutes a conservation policy that should save close to 20% onwater next year. She also is shifting to a new vendor that handlesall composting and recycling, but this will increase costs by about5%.
Question3 : Given the information below, andthe assumptions above, calculate what the assumed total annualcosts will be for this company's resource use. Round to the nearestwhole number.
a. $1,945,225 | ||
b. $2,455,328 | ||
c. $1,945,627 | ||
d. $945,233 |