3. The following graph shows a department store's long-run average cost (LRAC) curve. The output per period is measured as total sales (for example M and N). The manager is considering a new business plan. Given the LRAC curve, which statement is NOT correct Long-run average cost M Output per period A. The store should close some business when sales reach N. B. The store should increase sales in the interval (0, M). C. The store D. The store should expand business when sales reach N. indifferent between expanding sales or not in (M, N). ? rrect Cost per unit

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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don’t understand 3, and 8
8. For Nick, his utility function (U) for consuming a bundle of X (sandwich) and Y (Pepsi), is
U = 2X³ + VY . Now suppose, a Pepsi gives him a constant utility at 16. X is the number of
sandwiches he eats. What is marginal utility of eating the 3rd sandwich for him
А. 5
В. 38
С. 14
D. 19
totoment ahout Opportunity Cost is NOT correct
Transcribed Image Text:8. For Nick, his utility function (U) for consuming a bundle of X (sandwich) and Y (Pepsi), is U = 2X³ + VY . Now suppose, a Pepsi gives him a constant utility at 16. X is the number of sandwiches he eats. What is marginal utility of eating the 3rd sandwich for him А. 5 В. 38 С. 14 D. 19 totoment ahout Opportunity Cost is NOT correct
3. The following graph shows a department store's long-run average cost (LRAC) curve. The
output per period is measured as total sales (for example M and N). The manager is considering a
new business plan. Given the LRAC curve, which statement is NOT correct
Long-run
average cost
M
Output per period
A. The store should close some business when sales reach N.
B. The store should increase sales in the interval (0, M).
C. The store is indifferent between expanding sales or not in (M, N).
D. The store should expand business when sales reach N.
1g ic correct
Cost per unit
Transcribed Image Text:3. The following graph shows a department store's long-run average cost (LRAC) curve. The output per period is measured as total sales (for example M and N). The manager is considering a new business plan. Given the LRAC curve, which statement is NOT correct Long-run average cost M Output per period A. The store should close some business when sales reach N. B. The store should increase sales in the interval (0, M). C. The store is indifferent between expanding sales or not in (M, N). D. The store should expand business when sales reach N. 1g ic correct Cost per unit
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