Essays on Diminishing Returns

Question 1:

Suppose you are given the following: At output level of 6, what will be the marginal cost? Less than 2 Exactly equal to 2 More than 2 Given information is not enough to find out marginal cost Why is this? Question 2: What explains the U-shape of the AC curves in the short and the long run? Shapes of both, short and long run AC curves, are explained by the law of diminishing returns Law of diminishing returns explains the long run AC curve while economies and diseconomies of scale explain the short run AC curve Law of diminishing ...

American Public University

In this paper, I will analyze the advantages of creating a business in the form of corporation and cost structures of companies. Companies develop some strategies to have the possible least cost of production and gain an advantage in competition. Preference for forming an organization is the first step. Corporation legal structure presents some advantages to companies. Also, companies need to have full knowledge of costs to be able to manage costs to maximize their profits. Eventually, this paper will give some insights about these subjects. Corporation is a legal form of building an organization for a company. Operating ...

Conflict between Capitalists and Landlord

There exist diminishing returns to scale in the agricultural production due to the limited amount of land. When the world population increases, then the production of the agricultural production increases while more people are hired in the agricultural production. The surplus is distributed to the landowners (as rent), to the workers (as the wage), and the capital owners (as profit). Under the condition of diminishing returns, the agricultural production cannot increase the surplus to increase the profits, the wages, and the rent. The rent is fixed for the limited amount of land; therefore, the capital owners and the workers ...

Starbucks is a coffee corporation in America that was founded in 1971 and has turned out to be the largest coffeehouse company in the world. It offers the highest quality Arabica coffee as the base for her espresso drinks. This essay considers the case of Howard Schulz and the Starbucks coffee company, Harvard business school, case N9-803-361, revised September 30, 2005, by Nancy F. Koehn. Economist Nancy has researched about Starbucks Company under the leadership of Howard Schulz. She explains economic, management and marketing strategies that Howard Schulz has used to rescue Starbucks from collapsing. The case investigates the ...

Article Analysis

Inditex's Zara And The Power Of Comparative Advantage. Retrieved from http://www.forbes.com/sites/timworstall/2015/06/07/inditexs-zara-and-the-power-of-comparative-advantage/#1e3259fa6b4a This news article was published in the Forbes newspaper on June 7, 2015. In the article, the author attempts to explain factors that give Inditex comparative advantages in the strongly competitive textile industry. Inditex is a Spanish multinational apparel manufacturer and distributor. Currently, it is the largest fashion group in the world, and its best-known brand is Zara. This brand offers a wide range of high-quality designer clothes and personal accessories for men, women and children. Being the largest fashion retailer in the world, Inditex enjoys several comparative ...

Growth Rate of GDP

The growth rate of GDP is measured in terms of the original level of the GDP. Let us calculate the GDP for the following figures:

GDP in 2013: $13.1 trillion

GDP in 2014: $13.3 trillion Growth in GDP: $0.2trillion Growth rate of GDP =( 0.2/13.1)*100 =1.53% If the growth rate remains the same, let us calculate the number of years that will be required for the GDP to double itself. 13.3(1+ 1.53/100)^t = 2*13.3 Or, (1+1.53/100)^t = 2 Or, (1.0153)^t = 2

Taking log of both sides:

tlog1.0153 = log2 Or, t= log2/log1.0153 Or, t =45.6 Thus it will take almost 46 years to double the GDP ...