Discussions 1,2

D1

Sarah owns a bakery that has four ovens, one full-time exempt administrative employee, and

eight part-time hourly bakers.

Based on this information, respond to the following:

• Distinguish between the short run and the long run. What will differentiate the short

run and the long run?

• Describe fixed inputs and variable inputs. Which inputs are fixed and which are variable

in Sarah’s bakery?

• Why would marginal productivity decline after a certain level of production?

• How can this problem of diminishing returns or marginal productivity be reduced or

removed?

Your initial post should be a minimum of 300 words.

D2

Prior to beginning work on this discussion, read David Trainer’s article, Sysco Feasts on

Economies of Scale for Strong Competitive Advantage (Links to an external site.), as well as

Chapter 8 in your textbook, and respond to the following:

• How can the long-run average cost (LRAC) curve be derived from the short-run average

total cost (SRATC) curve?

• Describe economies of scale and diseconomies of scale.

• What are the determinants of economies of scale and diseconomies of scale,

respectively?

• Using a real-world company (other than Sysco), explain the causes of economies of scale

for your company.

• How would economies of scale help your company compete in its industry?

Your initial post should be a minimum of 300 words.