EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Question
Chapter 8, Problem 11SP
To determine
Identify the frozen dessert business that will have the lower marginal cost of production.
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Total Revenue $2,000 per Week Total Variable Cost $2,200 per Week Total Fixed Cost $1,000 per Week Let us suppose Harry's, a local supplier of chili and pizza, has the revenue and cost structure shown here.
Harry's should stay open in the short run.
Harry's should stay open in the long run.
Harry's should shut down in the short run.
Harry's should stay open in the short run but shut down in the long run.
Lafourche Parish, Louisiana, is the home to three crawfish farms. Thibodeaux Crawfish Farm harvests 40,000 pounds of crawfish per month at a total cost of $50,000. The Mardi Gras Mud Bug Cooperative harvests 25,000 pounds of crawfish per month at a total cost of $35,000. Lafourche Farms harvests 90,000 pounds of crawfish per month at a total cost of $140,000. These data suggest that there are significant economies of scale in crawfish production. Do you agree or disagree with this statement? Explain your answer.
Midtown Manufacturing Company makes trash cans and plastic buckets, both of which requires labor hours along with time on two machines. Producing a unit of trash cans requires 50 hours of labor, 5 hours on Machine A, and 10 hours on Machine B, while producing a unit of buckets requires 20 hours of labor, 8 hours on Machine A, and 2 hours on Machine B. The Company has available 2000 labor hours, 560 hours for Machine A, and 350 hours for Machine B. Each unit of trash cans brings in $20 in profit for the company and each unit of buckets brings in $3 in profit.
Be sure to write out the system of inequalities expressing these conditions and graph the feasible region.
Find the profit maximizing combinations of trash cans and buckets this company can and should produce.
Chapter 8 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
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