The Theory of the Harold’s Hoodies Ltd Firm - Economics Assignment Help

Assignment Task

Task

(b) As output increases, explain why:

(i) average fixed costs per unit change as they do?

(ii) average variable costs per unit change as they do? 

(iii) average total costs per unit change as they do? 

(c) What does marginal cost per unit mean? Explain why it changes the way it does as output increase

2). Harold’s Hoodies Ltd. sells sweatshirts at a price of $22 each. 

Harold’s fixed and variable production costs are given in the following table:

a). Harold’s Hoodies Ltd. is in a highly competitive industry, and is a typical firm making profits;

(i) What adjustment will occur in the price of the product? 

(ii) How will this adjustment affect Harold’s profits? 

(iii) What will be the final equilibrium level of the price? 

3. Vortex Vacuums Ltd. produces and sells vacuum cleaners. The company’s costs and revenues are shown in the graph below:

a). Is Vortex Vacuums Ltd. operating in a highly competitive market? Explain, using evidence from the graphs

(b) If Vortex Vacuums Ltd. is in a highly competitive industry, and is a typical firm making profits;

(i) What adjustment will occur in the price of the product? 

(ii) How will this adjustment affect the company’s profits? 

(iii) What will be the final equilibrium level of the price? __

4. GoodDog Ltd. produces the finest quality dog food. The company’s costs and revenues are shown in the graph below:

Is GoodDog Ltd. operating in a highly competitive market? Use the graphs the support your answer.

(a) If GoodDog Ltd. is not in a highly competitive industry, but is a typical firm making profits;

(i) What adjustment will occur in the price of the product? 

(ii) How will this adjustment affect GoodDog’s profits? 

(iii) What will be the final equilibrium level of the price? 

5. Knotty Knits Ltd. sells socks at a price of $8 per pair. [2K] [4A] [3C]

• The following table shows the fixed and variable production costs for Knotty Knits socks:
• Explain your reasoning

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