The total cost functions of all 4 saloon are given a under: Saloon 1 TC1 = 20+5Q1 2 Saloon 2 TC2 = 25+ 3Q2 2 Saloon 3 TC3 = 15+4Q3 2 Saloon 4 TC4 = 20+6Q4 2 TC is in rupees, and Q is number of customers being served on the saloon. (i) Fill out the tables below, with total, average, and marginal costs for each saloon for output level between 1 to 5 customers.
Adani Shantigram is a picturesque township on Ahmedabad-Gandhinagar
highway. The statement ‘The Good quality life’ shows the commitment of
the developer towards ensuring that the residents enjoy all the amenities
and services in the township at least cost and inconvenience. In order to
ensure competitive outcome, ATRICO (Adani Real Estate Arm) has
ensured that for all the important services, many service providers are
present, so that none of them can charge a high
residents. Therefore, there are 4 milk parlours, 4 laundromats, 4
photocopiers, 4 beauty saloons and 4 grocers in the township. This
number ‘4’ has been decided in a high level meeting, where this was
discussed that having less than 4 will result in duopoly/tight oligopoly,
and having more than 4 will require more space and therefore not
preferred.
Last month, the ladies in ‘Water Lily’ complained that the prices charged
by beauty saloons in the township are very high. In order to address the
complaints, details regarding cost structure of each of the 4 saloons were
sought. The total cost functions of all 4 saloon are given a under:
Saloon 1 TC1 = 20+5Q1
2
Saloon 2 TC2 = 25+ 3Q2
2
Saloon 3 TC3 = 15+4Q3
2
Saloon 4 TC4 = 20+6Q4
2
TC is in rupees, and Q is number of customers being served on the saloon.
(i) Fill out the tables below, with total, average, and marginal costs for
each saloon for output level between 1 to 5 customers.
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