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- Urban transit systems, especially those with rail systems, typically experience significant economies of scale in operation. Consider the transit system data in Table 11.4. Note that the quantity is in millions of riders.A tuition agency hires tutors to teach students. The following table displays how total outputincreases as tutors increase.No. of Tutors 1 2 3 4 5Total No. ofStudents4 10 18 24 3Tutors cost $50 each regardless of how many students each tutor has. The agency paid $500 in non-refundablemarketing fees to set up the business as a fix cost. In the short run, considering the shut-down condition, whatis the lowest price per student Tom’s tuition agency can charge? Explain your answer.A company is considering building a bridge across ariver. The bridge would cost $2 million to build andnothing to maintain. The following table shows thecompany’s anticipated demand over the lifetime ofthe bridge:Price per CrossingNumber of Crossings,in Thousands$8 07 1006 2005 3004 4003 5002 6001 7000 800a. If the company were to build the bridge, whatwould be its profit-maximizing price? Would thatlevel of output be efficient? Why or why not?b. If the company is interested in maximizing profit,should it build the bridge? What would be itsprofit or loss?c. If the government were to build the bridge, whatprice should it charge?d. Should the government build the bridge?Explain.
- A young chef is considering opening his own sushi bat'. To do so,he would have to quit his cttt'rent job,which pays $20,000 ayea1; and takeovet' a store building that he owns and cut'rently rents to his brother fol' $6,000 a year. His expenses at the sushi bar would be $50,000 for food and $2,000 for gas and electricity.\'Vhat at'e his explicit costs? a.$26,000 b.$66,000 c.$78,000 d.$52,000a) Assume that the output of a company is given by y (K, L) = K^0.5 * L^0.5, where the amount of capital on shortterm is given by K = 1 and wage costs are given by w = 1. Calculate and illustrate themaverage variable costs and marginal costs (marginal costs).b) In addition, assume that the price of capital is given by r = 1. Calculate the average totalsthe costs and illustrate using a figure where you also include the marginal cost asyou found in a). Comment on what you find.Do it asap plz
- A. Using the MR = MC rule, what is the profit-maximizing level of output (in thousandsof KWHs)?Explain Gresham’sAn Accra Chemical Factory discharges waste products into a river. These wastes kill many tilapia that are swimming upstream to spawn. While there will no doubt be other ecological damages from the chemical effluent, we wish to focus on those of the fishery. Let E be the tonnes of chemical effluent discharged per month. The equation for Marginal Damages (MD) is MD = 6E. The firm’s Marginal Abatement Cost (MAC) is given by MAC = 800 – 10E. a. Sketch the MD and MAC functions graphically on the same axes. b. Suppose E0 is the point where MAC = 0. Find the total damages (TD) to fishery by the factory per month.
- A firm produces two different kinds, A and B, of a commodity. The daily cost of producingx units of A and y units of B isC(x, y) = 2x2 − 4xy + 4y2 − 40x − 20y + 514Suppose that the firm sells all its output at a price per unit of $24 for A and $12 for B. Findthe daily production levels x and y that maximize profit. (Be sure to show your first andsecond order conditions.)Suppose the U.S. economy began to grow more rapidly than other counties in the world. What would be the likely impact on U.S. financial markets as part of the global economy?If the transit system were regulated to provide the most allocatively efficient quantity of output, what output would it supply and what price would it charge? What subsidy would be IIECESSEIIY to insure this efficient provision of transit services?