Using the Library Information Resource Network (LIRN), JSTOR, or any other electronic journal database, research eight (8) peer-reviewed articles that can be used to answer below assignment. Your discussion should summarize the articles in such a way that it can justify any arguments you may present in your below assignment and should be different from the abstract. In addition to your researched peer-reviewed article, you must include an example of the article researched as it is applied by industry (company, business entity, and so forth).
Please note: This article summary should not be the only article researched for your below assignment. You may (and should) have several other articles researched to fully answer your below assignment. The concept of this DQ is to allow students to be proactive in the research necessary to complete this assignment. You may use your article summary, partially or in its entirety in your below assignment.
Important: Please ensure that your reference for the article is in correct APA format, as your reference in your discussion post. Depending on which electronic database you use, you should see a “Cite” selection for your article. In addition, there should be a variety of articles summarized and as such, students should have different articles summarized. Your summary MUST include ALL of the following in your DQ post (include every item in the bullet list below, or you will not receive full credit):
Do these in order:
- In correct APA format, write the Reference of the article.
- Clearly state what the article is about and its purpose.
- Describe how you will use it in your upcoming assignment.
- Repeat for a total of eight (8) peer-reviewed sources.
Question:
Consider the following information:
Suppose fixed costs for a firm in the automobile industry (start-up costs of factories, capital equipment, and so on) are $5 billion and that variable costs are equal to $17,000 per finished automobile.
Because of competitive forces in the market, the market price falls as more firms enter the automobile market, or specifically, P=17,000+(150/n), where n represents the number of firms in a market.
Assume that the initial size of the U.S. and the European automobile markets are 300 million and 533 million people, respectively.
Now answer the following questions:
- Calculate the equilibrium number of firms in the U.S. and European automobile markets without trade.
- What is the equilibrium price of automobiles in the United States and Europe if the automobile industry is closed to foreign trade?
Now suppose the United States decides on free trade in automobiles with Europe. The trade agreement with the Europeans adds 533 million consumers to the automobile market, in addition to the 300 million in the United States.
- How many automobile firms will there be in the United States and Europe combined?
- What will be the new equilibrium price of automobiles?
- Why are prices in the United States different ?
- Are consumers better off with free trade? In what ways?
