What effect does the increase of the price of gasoline have on the cost curves of package delivery firms such as Federal Express or United Parcel Service? How might the effects differ for a software firm such as Symantec that uses the Internet?
Please provide the best answer for the statement.
Gasoline is a major input used in businesses involved in package delivery such as Federal Express or United Parcel Service. Increases in the price of gasoline leads to increases in their short-run average variable costs, marginal costs and average total costs of these firms. All of these curves would shift upward. Software firms such as Symantec that make heavy use of the Internet for their business are less likely to be affected by the increased price of gasoline because it is not a major component of their costs of production. In this case, the short-run cost curves will probably show little change.
You might also like to view...
Define the following terms. Give a complete and precise definition in one sentence. a. total utility b. marginal utility c. consumer’s surplus d. “law” of demand
What will be an ideal response?
What is the exchange rate between the dollar and the British pound if a pair of American jeans costs 60 dollars in New York and 30 Pounds in London?
A) 1.5 dollars per British pound B) 0.5 dollars per British pound C) 2.5 dollars per British pound D) 3.5 dollars per British pound E) 2 dollars per British pound
________ means that government sets the rules for market competition.
A. Market dynamics B. Market regulation C. Market economics D. Government metrics
It is less likely for oligopolists to maintain high prices in a repeated game than when the firms must choose one strategy to follow for the entire lifetime of the firm.
Answer the following statement true (T) or false (F)