Different Cost Components

Refer to text Ch.7, Example 7.2

The author provides the different cost components (sunk, fixed and variable) of three industries – computers, software and pizzas. Choose any one industry and discuss the main cost components of this industry.

Word limit: 50 – 100 words

Input Substitution

Refer to text, Ch. 7, Fig. 7.4 and Example 7.4 – ‘The Effect of Effluent Fees on Input Choices’.

How should the manager of a steel plant respond to an EPA-imposed effluent fee of $10 per gallon of wastewater dumped in the river?

Word limit: 50 – 100 words

Perfect Competition

Refer to text Ch. 8, Ex 8.3, ‘Some Cost Considerations for Managers’.

In the example, the author provides three guidelines for measuring the marginal cost correctly.

Explain briefly any two guidelines that the manager should keep in mind.

Word limit: 50 – 100 words

Monopoly Power

Refer to text, Ch. 10, Example 10.3 – ‘Markup Pricing: Supermarkets to Designer Jeans’

a. Why do small convenience stores which are often open 24-7 typically charge higher prices than supermarkets?

b. Why are designer label jeans typically more expensive than ‘mass-market’ jeans?

Word limit: 75 – 125 words