Based on forecasts of potential contracts, the CEO of Kibby and Strand is considering an option to lease the building next door, but he has concerns there may be some slack in current production capacity that could be utilized, negating the need for the addition space. There are also some newer technology cutting and sewing machines available with higher capacity the company could purchase, but they are expensive. So here are the CEOs options: Do nothing to increase production, but the downside is lost contracts.
Lease the building next door, then expand production by purchasing the same technology cutting and sewing machines as the company has now.
Try to squeeze more production out of the current production department setup. This may require overtime pay, and would definitely increase the maintenance costs on the current machines.
Replace all the machines in production with newer higher capacity machines and remain in the current production space.
How do you decide which option to select without reliable and valid data on the current production department? You can’t, and that is the CEO’s dilemma.

Jen left a job paying $75,000 per year to start her own florist shop in a building she owns. the market value of the building is $120,000. she pays $35,000 per year for flowers and other supplies, and has a bank account that pays 5 percent interest. what is the economic cost of jen's business?

Which of the following would cause a shift to the right of the supply curve for gasoline? i. a large increase in the price of public transportation. ii. a large decrease in the price of automobiles. iii. a large reduction in the costs of producing gasoline

Suppose that fixed costs for a firm in the automobile industry (start-up costs of factories, capital equipment, and so on) are $5 billion and that variable costs are equal to $17,000 per finished automobile. because more firms increase competition in the market, the market price falls as more firms enter an automobile market, or specifically, , where n represents the number of firms in a market. assume that the initial size of the u. s. and the european automobile markets are 300 million and 533 million people, respectively. a. calculate the equilibrium number of firms in the u. s. and european automobile markets without trade. b. what is the equilibrium price of automobiles in the united states and europe if the automobile industry is closed to foreign trade? c. now suppose that the united states decides on free trade in automobiles with europe. the trade agreement with the europeans adds 533 million consumers to the automobile market, in addition to the 300 million in the united states. how many automobile firms will there be in the united states and europe combined? what will be the new equilibrium price of automobiles? d. why are prices in the united states different in (c) and (b)? are consumers better off with free trade? in what ways?