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Questions tagged [firm]

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5
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5answers
88 views

Why do firms losing money almost always reduce labor costs via layoffs instead of pay cuts?

At least in the United States, firms seem to almost always reduce labor costs via layoffs rather than pay cuts. Pay cuts are so rare that they're literally headline news. From an economic standpoint, ...
0
votes
0answers
29 views

Demand Function

In cost and demand problems, why is the equation for price per unit named the demand function, as shown in the examples below? Also, why is it equal to a constant minus some multiple of the number of ...
0
votes
0answers
17 views

Interchangeability between financial / economic consulting

Writing a market analysis about a company that does debt bundling to lower total cost of debts for its customers. Googled around a tad, seems that financial consulting is in some way different from ...
2
votes
2answers
55 views

Using metrics provided by FRED to identify the business cycle

I am interested to see how the "business cycle" is associated with our firms sales. The hope is that if we can show that our sales line up with the business cycle then we can make decisions ...
3
votes
1answer
41 views

I'm studying the effect of a law on a sector: how do I select the control group?

I'm planning on using a regression discontinuity design (RDD) to estimate the impact of a sector-specific law on the firms in that sector. I need to create a control group and I have read somewhere in ...
0
votes
1answer
62 views

Graduate level texts/notes that cover the Short Run and Long Run Costs of firms' production

In undergrad econ we learned that it would cost a firm more money to increase its production in short term than in long term. MWG does not seem to cover this topic. I need a Graduate level texts/...
1
vote
1answer
494 views

Why is ATC tangent to Demand in a Monopolistic or Mopolistically Competitive Firm Making Zero Profit?

I understand that the Average Total Cost is equivalent to demand in a zero profiting monopoly or monopolistically competitive firm in order for there to be zero profits (when ATC = P at a given ...
1
vote
1answer
353 views

Optimal production level for a typical firm in long-run

Assuming all firms have identical cost functions. Now suppose there is an increasing shift in the demand curve. As we all know that for increasing costs case, both average costs (AC) and marginal ...
1
vote
1answer
27 views

How are assets distributed by types of organisations? [closed]

How wealth, assets or capital (measured in terms of revenues, assets, equity, etc.) is distributed among the various types of organizations (e.g. State, public companies, private conpanies, ...
1
vote
0answers
13 views

Microeconomics and management science of professional open source companies?

Are there research (and stories more broadly) about professional open source companies? To what types of products their are appropriate, what licensing schemes to choose? How to managed patents and IP?...
1
vote
0answers
21 views

How to model cooperatives

My understanding is that standard models in economics assume the firm is a capitalistic firm, in the sense that it pay workers a wage but no profits. (is that right?) I am interested in modeling ...
2
votes
2answers
2k views

Is the marginal cost the same for every firm in a perfectly competitive market?

Spin-off from: market equilibrium quantity $\ne$ firm profit maximising quantity? Consider a perfectly competitive market with equilibrium price $P_{eq}$ and quantity $Q_{eq}$ and firm with profit ...
1
vote
1answer
147 views

market equilibrium quantity $\ne$ firm profit maximising quantity?

Consider a perfectly competitive market with equilibrium price $P_{eq}$ and quantity $Q_{eq}$ and firm with profit maximising quantity $Q_f$ as illustrated below: I guess any firm in the market would ...
1
vote
0answers
49 views

Aggregation in heterogeneous firms models

I am reading the 2014 annual reviews article by Hopenhayn and am struggling to reach the aggregation results he states in the general case of vector of inputs (let's for simplicity assume two inputs, ...
1
vote
1answer
27 views

What is the difference between knowledge-based and R&D?

So far, I always thought that knowledge-based companies and R&D companies were the same. But recently our TA mentioned that they are different, I've searched a lot to find the differences between ...
1
vote
1answer
416 views

University course references for Market Structure/Industrial Organization

Are there any books that are used in University-level courses that contain a detailed analysis of market structure ( Perfect competition , Monopoly and so on)?
-1
votes
1answer
292 views

How to determine the marginal product for the following question? [closed]

Suppose that a firm has a Fixed cost of 10,000 dollars and Total Cost of 10,500 dollars for one unit and 11,100 dollars for two units of output. Which of the following is true for the Marginal Cost (...
1
vote
1answer
39 views

Causes of interlocking directorship connections between firms

I need to interpret some empirical results telling me that firms (intended as profit-maximising entities) prefer to be controlled (e.g. through interlocking directorships) by smaller and less ...
2
votes
1answer
76 views

Academic paper which justifies why companies are run better privately

A few years ago I was reading The Economist and I remember it stated a particular academic paper that underpinned the rationale for the existence of private equity firms. I have tried to find this ...
1
vote
1answer
612 views

Duality of cost minimization and profit maximization

The firm tries to maximize profits $\Pi$ \begin{align} \max_{K,L}\{\Pi(K,L) = F(K,L) - RK - wL\} \end{align} where $F$ is the linear homogeneous production function, $R$ the rental rate of capital $K$...
4
votes
3answers
610 views

Examples of how economists come up with a production function for a firm?

I am a young man studying economics on his own. In every microeconomics text I find, they teach you what a production function is, but they never show examples (or practice problems) on how one comes ...
1
vote
0answers
12 views

Ranking Sectors Based on “Inclusiveness”, greater variance among sectors with less firms

I am trying to rank sectors in Serbia based on how "inclusive" they are in their development, i.e. I have some indicators such as "share of profitable firms within sector", "share of exporting firms ...
4
votes
2answers
67 views

Literature / Evidence on Cash Hoarding of Firms

I have received anecdotal evidence (heard stories) about many firms hoarding cash (liquid assets) post 2008 and not spending it despite availability of many projects with positive NPV. However, when I ...
4
votes
1answer
64 views

Distribution of firm sizes and firm age

What are public sources for US firm/plant sizes, in order to characterize the firm size distribution? And what are stylized facts about the firm size distribution: What does it approximate to? ...
6
votes
1answer
104 views

Empirical ranking of firms based on productivity

I want to rank firms based on a metric, let's call it productivity. Theoretically, this firm productivity measure may be well defined. Empirically, however, data that account for all dimensions of ...