how do we answer this? 三、No Spacingv ab x, xA vNormalStylesPaneSteve produces bells. He spends time to create a custom design for each client. Once the bell is created,she produces the bell using material like steel, metal etc., which he buys at market prices. Hemanufactures all his bells in a factory that he rents by the hour. The factory produces 50 bells per hour.1. a) Explain how to calculate Steve's Marginal Cost of the 5th bell. Clearly state any assumptionsyou need to make. Explain your reasoning.2. b) Instead of the factory, Steve decides to hire an electronic manufacturing for bells. The cost tohire the electronic manufacturer is higher than the factory, but the electronic printer canproduce 150 bells per hour. How does this change his Marginal Costs? Explain your reasoning.Clearly state any assumptions you are making.3. c) He prices his bells in the following way- every client pays a fixed fee. Then they can order asmany bells as they want at zero additional cost. A consultant says Steve can increase his profitsby raising the per bell fee (making it > 0) and keeping the fixed fee as it is. Do you agree? Explainhow (if possible) he can increase his profits.FocusEnglish

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Steve produces bells. He spends time to create a custom design for each client. Once the bell is created, she produces the bell using material like steel, metal etc., which he buys at market prices. He manufactures all his bells in a factory that he rents by the hour. The factory produces 50 bells per hour.

Steve produces bells. He spends time to create a custom design for each client. Once the bell is created, she produces the bell using material like steel, metal etc., which he buys at market prices. He manufactures all his bells in a factory that he rents by the hour. The factory produces 50 bells per hour.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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