You own a bakery shop. One of your customers places an order for 12 cupcakes. You plan to charge the customer $15.00. Ar the last mimut, the eter im the cupcake order to 13 total cupcakes. You accommodate the request and charge the customer $16.00, Which of the following satemen i com O The 13th cupcake yields a marginal revenue of $1.0o0 O Your total cost is S16.00 O Your profit is equal to $16.00. The 13th cupcake yields a marginal cost of $1.00 O The 13th cupcake yields a marginal profit of S1.00

You own a bakery shop. One of your customers places an order for 12 cupcakes. You plan to charge the customer $15.00. Ar the last mimut, the eter im the cupcake order to 13 total cupcakes. You accommodate the request and charge the customer $16.00, Which of the following satemen i com O The 13th cupcake yields a marginal revenue of $1.0o0 O Your total cost is S16.00 O Your profit is equal to $16.00. The 13th cupcake yields a marginal cost of $1.00 O The 13th cupcake yields a marginal profit of S1.00

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter11: Price And Output Determination: Monopoly And Dominant Firms

Section: Chapter Questions

Problem 2E: Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one large...

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Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one large firmâ€”Tile King. Ajax produces a multiheaded tunnel wall scrubber that is similar to a model produced by Tile King. Ajax decides to charge the same price as Tile King to avoid the possibility of a price war. The pnce charged by Tile King is $20,000. Ajax has the following short-run cost curve: TC=800,0005,000Q+100Q2 Compute the marginal cost curve for Ajax. Given Ajaxs pricing strategy, what is the marginal venue function for Ajax? Compute the profit-maximizing level of output for Ajax. Compute Ajaxs total dollar profits.
Drybar, a hair salon, has very loyal customers and faces a weekly demand for blowouts equal to qD = 1,040 – 20P. The salon has weekly total cost of TC(q)=0.05q2+20q+500. a) Ia diagram, draw drybar’s demand curve (PD). Write Drybar’s revenue as a function of the firm’s quantity. Compute the expression of Drybar’s Marginal Revenue and draw the MR curve in your. In the diagram, draw the MR curve. Note that it has twice the slope than demand. b) In the same diagram, illustrate drybar’s average total cost curve (ATC), and marginal cost curve (MC). If Drybar were a perfectly competitive firm, in the long run at what price would it sell its output? Drybar instead has market power. Suppos the firm charges all customers the same price for a blowout. c) Find the profit maximizing level of output (q*) and price (p*). Compute the price elasticity of demand at q* and show that at q* MR(q*) = p*(1+1/e) = MC(q*) i) Compute the consumer surplus created by Drybar and the profit of the firm.
Only typed answer and please don't use chatgpt A firm faces the following average revenue (demand) curve: P = 120 – 0.02Q where Q is weekly production and P is price, measured in cents per unit. The firm’s cost function is given by C = 60Q + 25,000. Assume that the firm maximizes profits. What is the level of production, price, and total profit per week?
A publisher faces the following demand schedule for the next novel from one of itspopular authors:Price Quantity Demanded$ 100 0 novels90 100,00080 200,00070 300,00060 400,00050 500,00040 600,00030 700,00020 800,00010 900,0000 1,000,000The author is paid $2 million to write the book, and the marginal cost of publishingthe book is a constant $10 per book.a. Compute total revenue, total cost, and profit at each quantity. What quantity woulda profit-maximizing publisher choose? What price would it charge?b. Compute marginal revenue. (Recall that MR = ΔTR/ΔQ.) How does marginal revenuecompare to the price? Explain.C. Graph the marginal-revenue, marginal-cost, and demand curves. At what quantitydo the marginal-revenue and marginal-cost curves cross? What does this signify?d. In your graph, shade in the deadweight loss. Explain in words what this means e. If the author were paid $3 million instead of $2 million to write the book, how wouldthis affect the publisher’s decision regarding what…
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Henry Potter owns the only wcU in town that pro-ducesclean drinking water. He faces the follO\\•ingdemand, marginal revenue, and marginal cost curves:Demand: P • 70 - QMarginal Revenue: MR • 70 - 2Q~arginal Cost: MC • lO + Qa. Graph these three curves. Assuming thatMr. Potter maximizes profit, what quantity docshe produce? What prioc does he charge? Showthese rcsuiiS on your graph.b. Mayor George Bailey, concerned about water con~sumcrs_. is considering a price ceiling that is10 percent below the monopoly price derived inpart (a). What quantity would be demanded atthis new price? Would the profit-maximizingMr. Potter produce that amount? Explain. (Hi11t:1hink about marginal cost.)c. George's Uncle Billy says that a price ceiling is abad idea because price ceilings cause shortages.Is he right in this case? What size shortage wouldthe prioc ociling create? Explain.d. George's friend Clarence, who is even more con~cerncd about consumers, suggests a price ceiling50 percent below the…
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In reference to the attached chart, I was supposed to calculate the bundle prices and net profits. I got assistance, and here is the feedback: The Satisfying Smoothie's net profit is 10.00 - 5.00 = 5.00. The Hydration Power Drink's net profit is 7.00 - 3.00 = 3.00. How is the net profit for Hydration Power Drink 3.00, when 7-3= 4? And Why would it be 7-3, and not 7-6?
Only typed answer and please don't use chatgpt Find the marginal revenue for the firms that face the following demand curves: a. Q=1,000-5P b. Q=100P^-2
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11.2 Your college newspaper, The Collegiate Investigator, sells for 90¢ per copy. The cost of producing x copies of an edition is given by C(x) = 70 + 0.10x + 0.001x2 dollars. (a) Calculate the marginal revenue R'(x) and profit P'(x) functions. HINT [See Example 2.] R'(x) = P'(x) = (b) Compute the revenue and profit, and also the marginal revenue and profit, if you have produced and sold 500 copies of the latest edition. revenue $ profit $ marginal revenue $ per additional copy marginal profit $ per additional copy Interpret the results. The approximate from the sale of the 501st copy is $ . (c) For which value of x is the marginal profit zero?x = copiesInterpret your answer. The graph of the profit function is a parabola with a vertex at x = , so the profit is at a maximum when you produce and sell copies.
For many decades, the Royal Mail had a legal monopoly in the U.K. Companies in thepostal business have increasing returns to scale, then constant returns to scale, andthen decreasing returns to scale. The Royal Mail’s minimum average cost is £2 at 100million deliveries and its minimum marginal cost is £1 at 75 million deliveries.The demand for postage is zero at a price of £10, and demand is 300 milliondeliveries at a price of £0. Marginal revenue is zero at a price of £10 and 150 at aprice of £0.Note: Unless otherwise stated, the numerical answers in this question do not need tobe exact but should correspond to how you have drawn your graph. (a) Draw a large graph showing the Royal Mail’s average cost curve and itsmarginal cost curve. Show how many deliveries would be made, and at whatprice, if Royal Mail operated as a monopoly. Show the Royal Mail’s profit orloss on the graph.