EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 9RQ
To determine
To evaluate: Reasons for rent differences in locations of fast-food items and why rent plays a major role in deciding prices of fast-food items. Mr. Z, finds the rent component is very high, support his statement.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Consider a production process where flowers are grown (the output) using gardeners (labor) and greenhouses (capital). The quantity of flowers grown per day with various combinations of labor and capital are shown in the table below.
Suppose that each gardener is paid
$200
per day and the greenhouse is rented for
$500
per day.
Fill in total cost in the table below. (Enter your responses as integers.)
Labor
Capital
Output
Total Cost
0
1
0
$
1
1
160
2
1
480
3
1
640
4
1
720
5
1
760
Graphically show the relationship between the total fixed cost, the total variable cost, and the total cost. Draw a total cost curve and total revenue curve so that at some outputs that the firm takes losses, outputs where the firm makes unnecessary profits, and where the firm makes only necessary profits. Then, pick a point where the firm is taking losses and show on the graph, the firm’s total losses. Do the same for a point (an output level) where the firm may be making unnecessary profits.
For a firm to maximize profit, it must minimize the cost of producing whatever quantity it produces. Use the isocost and isoquant tools to present a firm that is choosing the optimal levels of labor and capital (i.e., tools) to produce a certain quantity and a certain cost. Then, show in your diagram how this firm would respond if it were to expand and spend more on its inputs, assuming it is best for the firm to become more “capital intensive” as it grows. Comment on WHY a firm might best become more capital intensive as it expands, even when the relative prices of labor and capital remain unchanged.
Chapter 9 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 9.2 - Prob. 1MQCh. 9.2 - Prob. 2MQCh. 9.2 - Prob. 1TTACh. 9.2 - Prob. 2TTACh. 9.4 - Prob. 1MQCh. 9.4 - Prob. 2MQCh. 9.5 - Prob. 1MQCh. 9.5 - Prob. 2MQCh. 9.8 - Prob. 1MQCh. 9.8 - Prob. 2MQ
Ch. 9.8 - Prob. 1TTACh. 9.8 - Prob. 2TTACh. 9.9 - Prob. 1MQCh. 9.9 - Prob. 2MQCh. 9.9 - Prob. 1TTACh. 9.9 - Prob. 2TTACh. 9.10 - Prob. 1MQCh. 9.10 - Prob. 2MQCh. 9.10 - Prob. 1TTACh. 9.10 - Prob. 2TTACh. 9.10 - Prob. 1.1MQCh. 9.10 - Prob. 2.1MQCh. 9.10 - Prob. 3.1MQCh. 9.10 - Prob. 1.1TTACh. 9.10 - Prob. 2.1TTACh. 9.10 - Prob. 1.2MQCh. 9.10 - Prob. 2.2MQCh. 9.10 - Prob. 3.2MQCh. 9 - Prob. 1RQCh. 9 - Prob. 2RQCh. 9 - Prob. 3RQCh. 9 - Prob. 4RQCh. 9 - Prob. 5RQCh. 9 - Prob. 6RQCh. 9 - Prob. 7RQCh. 9 - Prob. 8RQCh. 9 - Prob. 9RQCh. 9 - Prob. 10RQCh. 9 - Prob. 9.1PCh. 9 - Prob. 9.2PCh. 9 - Prob. 9.3PCh. 9 - Prob. 9.4PCh. 9 - Prob. 9.5PCh. 9 - Prob. 9.6PCh. 9 - Prob. 9.7PCh. 9 - Prob. 9.8PCh. 9 - Prob. 9.9PCh. 9 - Prob. 9.10P
Knowledge Booster
Similar questions
- Based on your answers to the WipeOut Ski Company in Exercise 7.3, now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of 25 each. What will be the companys profits or losses? How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? At the given quantity and price, is the marginal unit produced adding to profits?arrow_forwardAutomobile manufacturing is an industry subject to significant economies of scale. Suppose there are four domestic auto manufacturers, but the demand for domestic autos is no more than 2.5 times the quantity produced at the bottom of the long-run average cost curve. What do you expect will happen to the domestic auto industry in the long run?arrow_forwardUSE THE GRAPH TO ANSWER THE FOLLOWING QUESTIONS: (IF REQUIRED, USE THE DISCREET NUMBER OF BARRELS). ANSWERS IN WHOLE NUMBER a. How many barrels of natural-organic oil reflect the lowest minimum average variable cost?b. How much is the price of the natural-organic oil per barrel?c. How much is the fixed cost to produce the natural-organic oil?d. How many barrels of natural-organic oil should the firm produce to maximize its profit?e. At what production level would the marginal cost exceed the average cost?arrow_forward
- ASAP Does the state of mr=mc in a perfect competitive market mean that the firm is supposed to sell out no matter how much marginal cost they put? Because mr=mc occurs only if the product sells out 100% corresponing to the put marginal cost, right? I also know that the state is occured because the price in a competitive market is fixed, but i wondered if the state means also selling out completely.arrow_forwardEconomics Answer "False" or "True" each of the following. Justify by relying on graphical analysis whenever possible. 3.- If the marginal income is greater than the marginal cost, the competitive company will increase its profits by increasing its production (we assume increasing marginal costs). 4.- An industry in which the production process can be done with increasing economies of scale (for any level of production) cannot be one of perfect competition. answer both asap thnxarrow_forwardWhat are Megan’s fixed costs? Given the nature of sidewalk shoveling production, why does Megan’s marginal cost curve look like it does in your graph? Suppose the market price for shoveling a sidewalk is $20 per sidewalk. How many sidewalks will Megan shovel each day to maximize profit? Suppose the market price of shoveling a sidewalk rises to $25 because it has been a snowy winter. How many sidewalks will Megan shovel each day to maximize profit?arrow_forward
- Imagine that you are asked to consult with a drama club that puts on a play every year. The club asks you: How much should we charge for tickets if we want to cover our costs? You begin by listing the club’s fixed and variable costs and then make a recommendation for a ticket price. Give the club three examples of each type of cost. Fixed Costs [example 1] [example 2] [example 3] Variable Costs [example 1] [example 2] [example 3] What is your recommendation for ticket pricing? Do you cover just fixed costs or both costs?arrow_forwardImagine that you are asked to consult with a drama club that puts on a play every year. The club asks you: How much should we charge for tickets if we want to cover our costs? You begin by listing the club’s fixed and variable costs and then make a recommendation for a ticket price. Give the club three examples of each type of cost. Fixed Costs [example 1] [example 2] [example 3] Variable Costs [example 1] [example 2] [example 3] What is your recommendation for ticket pricing? Do you cover just fixed costs or both costs? Schiller, B. R., & Gebhardt, K. (2016). The economy today (14th ed.). Columbus, OH: McGraw-Hill Higher Education.arrow_forwardQ1) Complete the following table and what production technique should this firm use: Assuming the price of capital (k) is $5 and the price of labor (L) is $10, and the price of commodity (O) is $3. Technique TC Profit(7t) A 50 10 6 B 50 9 8 C 50 5 10 D 50 12 8 E 50 2 10 F 50 7 12arrow_forward
- Briefly explain what is meant by the term "fixed costs" and provide three examples of same. What determines a firm's level of fixed costs?arrow_forwardQUESTION 15 Use the following table and use your previous calculations at what quantity of output does marginal cost = average variable cost and marginal cost = average total cost Total Output Total Cost TFC TVC AFC AVC ATC MC 0 $20 10 $40 20 $60 30 $90 40 $120 50 $180 60 $280 a. MC = ATC between 20/40 of output MC = AVC between 10/30 of output b. MC = ATC at 40 of output MC = AVC at 20 of output c. MC = ATC at 30 of output MC = AVC at 10 of output d. MC = ATC between 10/20 of output MC = AVC between 30/40 of output e. MC = ATC between 30/40 of output MC = AVC between 10/20 of outputarrow_forwardSuppose LA.Banana employs workers to harvest bananas. Answer the following questions using the information provided below: Quantity of labour: 0 labour 1 labour 2 labour 3 labour 4 labour 5 labour 6 labour Units of Output: 0 banana 16 banana 21 banana 25 banana 31 banana 36 banana 40 banana a.) Calculate the marginal product of labor, the value of the marginal product of labor, and the marginal profit ,suppose a fully competitive company, LA"Banana, where wages are fixed at $800 and each banana (output) sells for $20.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning