Swing shift Your firm prints the novelty baseball cards that candy makers include in their bubblegum. Since you regularly sell 100,000 cards per week, you invested in four separate production lines that can each produce 25,000 cards in a standard 40
hour work week. Now a few of the candy makers are increasing their orders so that you will need to produce 150,000 cards per week, at least temporarily. If you produce these cards by adding a swing shift from 4pm to midnight, you will have to pay workers time and a half. What does this imply for the shape of your short-run marginal cost curve? What does it imply for your pricing?
Since this increase in production may be temporary, it may not pay to invest in additional production lines. By adding another shift, your labor is more expensive implying that your short-run marginal costs are rising. This means that you must increase prices just to maintain your price-cost margins.
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What are economies of scale and diseconomies of scale? How do they arise? What do they imply for the shape of the LRAC curve?
What will be an ideal response?
Which of the following statements is not related to the price controls that existed during World War II?
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