Part A- 300 Words, APA Format, Cite within Paper and add references
Samuelson & Marks, Number 8 Page 219.
A trendy French restaurant is one of the first businesses to open in a small corner of a commercial building still under construction. The restaurant has received rave reviews and has lines of diners waiting for tables most nights.
- In the short run (next few months), what measures should the restaurant take to maximize its profits? Explain.
- In the long run (next six months and beyond), how can it maximize its profits? (Assume that the impressive state of demand is permanent).
Part B- 300 Words, APA Format, Cite within Paper and add references
Samuelson and Marks, Question #10, p. 220.
The last decade has witnessed an unprecedented number of mega-mergers in the banking industry: Bank of America’s acquisitions of Fleet Bank, MBNA, and U.S. Trust; Bank of New York’s acquisition of Mellon Financial; and Wells Fargo’s acquisition of Wachovia, to name several of the largest consolidations. Besides growth for its own sake, these superbanks are able to offer one-stop shopping for financial services: everything from savings accounts to home mortgages, investment account, insurance vehicles, and financial planning.
- In the short run, what are the potential cost advantages of these mergers? Explain.
- Is a $300 billion national bank likely to be more efficient than a $30 billion regional bank or a $3 billion state-based bank? What economic evidence is needed to determine whether there are long-run increasing returns to scale in banking?
- Do you think these mergers are predicated on economies of scope?