Assume you are the owner of a delivery service company with a large fleet of trucks and drivers. Each of your drivers is allowed two thirty-minute breaks per day. However, some of them take longer breaks than your policy allows
You find out about this problem only by accident when you heard a couple of employees discussing during a morning coffee break. What kind of a problem is this for you from an economic point of view and what methods might you employ to mitigate this problem?
This is a market failure. It is basically a case of imperfect information. The absence of full knowledge can lead to transactions that are ultimately disadvantageous. In the current case these employees are taking away from the productivity and profitability of the firm. One way to ameliorate this problem would be to have random checks of drivers or to have them call in regularly with their progress. This of course requires increased supervision costs.
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How do the price and quantity of a monopoly compare to that of a perfectly competitive industry?
What will be an ideal response?
If the firm can only afford developing one of the software, which one would it rather develop (based on expected profit/gain)
a. The simple voice-activated software b. The complicated thought-activated software c. Neither of the software d. Need more information
If there are 500 firms in an industry, and the four-firm concentration ratio is 90 percent, then
a. 496 firms account for the remaining 10 percent of sales b. the industry must be monopolistic competition c. the 4 firms each have 90 percent market share d. the top four firms are a monopoly e. the leading four firms receive 10 percent of industry profit
A factor of production that has been produced for use in the production of other goods and services is:
A) labor. B) money. C) capital. D) natural resources.