In the Bag by Copy Company case study, the executives are faced with wiring 10 different copiers that they make in five separate European countries. They must choose between specializing by country and specializing by manufacturing of copier type. The executives hire a lobbyist to work for a standard regulatory and sales environment across the entire European Union. Why?
What will be an ideal response?
A standard environment would reduce the need for specializing by country. With a standard environment, Bag by could reduce costs by assigning jobs based on manufacturing specialty: Employees would be more efficient due to higher levels of manufacturing skills, and fewer cross-training expenses would be incurred. Lower costs can increase profits earned by the company.
You might also like to view...
Economic models
a. are always based on realistic assumptions. b. usually predict perfectly. c. can never be tested with real world data. d. are used to describe cause-and-effect relationships. e. are too simple to be of much use.
People who receive the benefit of a good without contributing to its costs of production are called
a. contributors in kind. b. free riders. c. frequent flyers. d. cost maximizers.
A tax imposed by a country on an imported good or service is called a
A. quota. B. tariff. C. non-tariff barrier. D. trade embargo.
A firm is currently producing at the point where MC = MR. The situation for the firm at this point is P = $5, Q = 100, ATC = $6, AVC = $4.50. What do you recommend this firm do?
A) Increase production above the current output rate, because MC = MR at this rate of output. B) Continue to produce the current output rate, because P > AVC. C) Shut down, because AVC > P. D) Shut down, because ATC > P.