question archive DPS Indirapuram is predicting an atleast 15% reduction in its revenues in the Fall 2020 semester due to a reduced demand for school education caused by the current pandemic

DPS Indirapuram is predicting an atleast 15% reduction in its revenues in the Fall 2020 semester due to a reduced demand for school education caused by the current pandemic

Subject:EconomicsPrice: Bought3

DPS Indirapuram is predicting an atleast 15% reduction in its revenues

in the Fall 2020 semester due to a reduced demand for school education caused by the current pandemic. Assume a decreasing returns to scale technology and a competitive market. Also, assume that the market was in the long run equilibrium prior to the outbreak of covid-19.

Discuss the short run and long run implications of this reduction for:
1) the choice of output by the school
2) capital and labour choices by the university

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