Suppose Miriam sets a single price but also charges Shane an entry fee before he can buy any donuts Provide answers and include a couple of sentences providing an explanation for your answer. a. If Miriam trying to maximize her producer surplus, where will she set the price and entry fee, and how many donuts will she sell? b. Does your answer to (a.) violate our result that profit is maximized by setting the quantity where marginal revenue equals marginal cost? Number of Donuts Shane's Marginal Value Miriam's Marginal Cost 1 $1.70 $0.90 2 $1.60 $0.95 3 $1.50 $1.00 4 $1.40 $1.05 5 $1.30 $1.10 6 $1.20 $1.15 7 $1.10 $1.20 8 $1.00 $1.25 9 $0.90 $1.30 10 $0.80 $1.35 11 $0.70 $1.40 12 $0.60 $1.45 13 $0.50 $1.50
Suppose Miriam sets a single price but also charges Shane an entry fee before he can buy any donuts Provide answers and include a couple of sentences providing an explanation for your answer. a. If Miriam trying to maximize her producer surplus, where will she set the price and entry fee, and how many donuts will she sell? b. Does your answer to (a.) violate our result that profit is maximized by setting the quantity where marginal revenue equals marginal cost? Number of Donuts Shane's Marginal Value Miriam's Marginal Cost 1 $1.70 $0.90 2 $1.60 $0.95 3 $1.50 $1.00 4 $1.40 $1.05 5 $1.30 $1.10 6 $1.20 $1.15 7 $1.10 $1.20 8 $1.00 $1.25 9 $0.90 $1.30 10 $0.80 $1.35 11 $0.70 $1.40 12 $0.60 $1.45 13 $0.50 $1.50
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter14: Monopoly
Section: Chapter Questions
Problem 3PA
Related questions
Question
Suppose Miriam sets a single price but also charges Shane an entry fee before he can buy any donuts Provide answers and include a couple of sentences providing an explanation for your answer.
a. If Miriam trying to maximize her
b. Does your answer to (a.) violate our result that profit is maximized by setting the quantity where marginal revenue equals marginal cost?
| Number of Donuts | Shane's Marginal Value | Miriam's Marginal Cost |
| 1 | $1.70 | $0.90 |
| 2 | $1.60 | $0.95 |
| 3 | $1.50 | $1.00 |
| 4 | $1.40 | $1.05 |
| 5 | $1.30 | $1.10 |
| 6 | $1.20 | $1.15 |
| 7 | $1.10 | $1.20 |
| 8 | $1.00 | $1.25 |
| 9 | $0.90 | $1.30 |
| 10 | $0.80 | $1.35 |
| 11 | $0.70 | $1.40 |
| 12 | $0.60 | $1.45 |
| 13 | $0.50 | $1.50 |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
