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Textbooks / Business / Principles of Economics 6 / Chapter 14 / Problem Problems and Applications 14.11

Suppose that the U.S. textile industry is competitive, and there is no international

Principles of Economics | 6th Edition | ISBN: 9780538453059 | Authors: N. Gregory Mankiw ISBN: 9780538453059 472

Solution for problem Problems and Applications 14.11 Chapter 14

Principles of Economics | 6th Edition

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Principles of Economics | 6th Edition | ISBN: 9780538453059 | Authors: N. Gregory Mankiw

Principles of Economics | 6th Edition

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Problem Problems and Applications 14.11

Suppose that the U.S. textile industry is competitive, and there is no international trade in textiles. In long-run equilibrium, the price per unit of cloth is $30. a. Describe the equilibrium using graphs for the entire market and for an individual producer. Now suppose that textile producers in other countries are willing to sell large quantities of cloth in the United States for only $25 per unit. b. Assuming that U.S. textile producers have large fixed costs, what is the short-run effect of these imports on the quantity produced by an individual producer? What is the short-run effect on profits? Illustrate your answer with a graph. c. What is the long-run effect on the number of U.S. firms in the industry?

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Management Notes  Certainty is the knowledge of consequences of each alternative.  Uncertainty is the lack of knowledge of consequences of each alternative.  Risk is the assumption about the alternatives.  Conditions that managers use to make decisions much more under risk and uncertainty.  Take Corrective Actions as Necessary: 1. Reorder our evaluations 2. Reschedule you work flow 3. Reassign you personnel 4. Renew the search (new alternatives) 5. Revise objectives (last resort)  A competitive advantages of organizing is distinctive competency and differential benefits.  When searching for an alternative, there are three areas that you must take

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Textbook: Principles of Economics
Edition: 6
Author: N. Gregory Mankiw
ISBN: 9780538453059

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Suppose that the U.S. textile industry is competitive, and there is no international