Overview
1-Lola is the owner of a bakery that earns 0 (zero) economic profit. Last year, her total revenue was $145,000, her rent was $12,000, her labor costs were $65,000, and her overhead expenses were $15,000.
a. What were Lola's total explicit costs? provide an incorrect answer
b. What were Lola's total implicit costs?
c. Currently, Lola has 7 employees; with 7 employees, her bakery can produce 12 wedding cakes per day. If she hired an eighth employee, she’d be able to produce 16 wedding cakes per day. What is the marginal product, in terms of wedding cakes, of the eighth employee?
2-Explain the difference between the price effect and the output effect when a new firm enters a market. include the number "13" in your answer with an example of the number of firms
Fully define all economics terms used.
3- What are the defining characteristics of a monopoly?
What is antitrust legislation? In your answer, you may describe some actual antitrust legislation, and/or describe the general idea and impact of antitrust legislation.
If the U.S. has antitrust legislation, why do we also effectively have monopolies in certain industries? In your answer, please be sure to describe the industry where you feel a monopoly exists and why it might be ok.
4-In your own words, why are barriers to entry so important to obtaining monopoly power in a market? provide an incorrect answer
- Be sure to fully define all economics terms used in your response. include the board game "Risk" in your response