Mindy's salon is a small business that acts as a price taker (MR=P). The prevailing market price for each haircut is $20. Mindy's cost are given by Total cost = 0.1q^2 + 10q + 50 where q = the number of customers a day. a. How many customers should Mindy choose to maximize profit? b. Calculate Mindy's maximum daily profit. c. Graph these results, and label Mindy's supply curve.

Mindy's salon is a small business that acts as a price taker (MR=P). The prevailing market price for each haircut is $20. Mindy's cost are given by Total cost = 0.1q^2 + 10q + 50 where q = the number of customers a day. a. How many customers should Mindy choose to maximize profit? b. Calculate Mindy's maximum daily profit. c. Graph these results, and label Mindy's supply curve.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.1P

See similar textbooks

Similar questions

You are running a chocolate factory and need to decide on the price to sell the chocolate as well as the quantity to produce. Demand curve; Q = 8.5 - 0.05 * P. The cost curve is C = 100 + 38Q. The business is a profit maximizer. 1) What is the best price to charge each week? 2) What is the best quantity to make each week? 3) What are the expected profits Is it possible to get this in an excel with equation formulas
For the Statement at the end, there are drop down arrows and options for you to choose from, and values to fill in. Drop down options will be listen in brackets, and blanks are values that must be found. Simone's profit is maximized when she produces _______shirts. When she does this, the marginal cost of the last shirt she produces is $_______ , which is (greater/less) than the price Simone receives for each shirt she sells. The marginal cost of producing an additional shirt (that is, one more shirt over the amount that would maximize her profit) is ________, which is (greater/less) than the price Simone receives for each shirt she sells. Therefore, Simone's profit-maximizing quantity corresponds to the intersection of the (marginal cost and marginal revenue/ total cost and profit/ total cost and total revenue/ marginal cost and total revenue/ total revenue and profit/ total cost and marginal revenue) curves. Because Simone is a price taker, this last condition can also be…
Suppose consumers see coffee as an undifferentiated good and that there are hundreds of coffee shops in the market. The market price of a cup of coffee is $3. Carly’s coffee shop has a daily short-run total cost given by ?? = 5 + 1 4 ? 2 . The associated marginal cost curve is ?? = 1 2 ?. How many cups of coffee should Carly make a day if she wants to maximize profits?
Jack scalps lawns in the neighborhood for $36 per house. He does ten houses per day. He is incurring total costs of $400 per day, of which $100 is fixed. The marginal cost per house is constant. (i) What is the value of the marginal cost associated with scalping the lawn of one house? (ii) What are profits equal to at the profit-maximizing level of output?.
To produce x units of t-shirts costs C(x) = 7.50x + 1200. The revenue is R(x) = 16x. a) Find the break-even point b) How many t-shirts needs to be produced and sold in order to make a profit of $500?
Suppose an avocado farm has cost: C = 0.002q3 + 22q + 750 (where q is measured in bushels). Marginal cost is: MC = 0.006q2 + 22. The market price per bushel of avocados is $46. In the short-run, this firm's profit is In the short-run, this firm's profit is enter your response here. (Round your response to the nearest penny.)
A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed cost of $200. What is its profit? What is its marginal cost? What is its average variable cost?
Assume a number of street vendors sell hamburgers in a city. Each vendor has a marginal cost of 30 NOK per hamburger sold and there are no fixed costs. The maximum number of hamburgers that any vendor can sell is 100 per day. a) If the market is perfectly competitive and the price of each hamburger is 40 NOK. How many hamburgers does each street vendor want to sell and what is each vendor’s profit per day assuming the desired quantity is sold?b) Why is this solution not a long run equilibrium?c) Suppose all the vendors merges and thus appears as a monopolist in the market. After merging marginal cost is constant. Make a diagram and explain the optimal solution for the monopolist.d) How can you explain that the solution from c) is such that the profit is maximized?e) Explain the social costs of the monopoly situation in this market. f) Suppose many consumers in this hamburger market became “addicted”. How would you explain this change in consumers demand and how would it affect social…
Don't use chatgpt or any AI A profit-maximising firm in a competitive market is currently producing 1,000 units of output. It has average revenue of $50, average total cost of $40 and fixed cost of $10,000. a) What is its profit? b) What is its marginal cost? c) What is its average variable cost? Is the efficient scale of the firm more than, less than or exactly 1,000 units?
4.4. If the firm produces the profit-maximizing output, what is its total cost? 4.5. If the firm produces the profit-maximizing output, what is its profit?
Caroline opens a lemonade stand for two hours. She spends $15 for ingredients and sells $50 worth of lemonade. In the same two hours, she could have mowed the neighbor's yard and earned $10. a. What are Caroline’s explicit and implicit costs? b. What is Caroline’s accounting profit? What is her economic profit? Show how you calculated each profit. The government imposes a $1,000 one-time license fee on all pizza restaurants. As a result, which of the following cost curves shift, and why or why not?a. Average total cost.b. Marginal Cost.c. Average Variable Cost.
The relationship between the firm's average variable, average total, and marginal cost curves above: Marginal Reveue = Price = US $ 2.50 ; a) Use the graph to find the Firm's profit-maximizing output. b) If the firm maximizes its profit, how much profit does it make (about)? Should the firm stay in business? c) Will other firms with costs the same as Firms enter the market? Explain.