Please answer both of these questions. Thanks so much! deaance. Since the marginal cost of providing the seat is essentiallyQ: Movie theaters have a similar cost structure, where marginalI wonder why those last-minute deals aren't better. Perhapssimilar deal,day of the perform-andtheremaking this uneconomical for the theatersaazero,d whetheroles class.ner seat is very low. Why don't they provide last-minute seatsrequiresluction).am typ-e class.d fifthze myat a discount?8.13The entire city was essentially shut down for the past two days be-use of an ice storm. (Texans aren't used to driving on icy roads; theoads aren't well de-iced; and the hills make driving especially haz-ardous.) A local restaurateur, whose business was open yesterday,said, "With the low cost of being here, anything we make is fine."Now that cannot be entirely true. If he sells one Coke in 8 hours.surely the revenue will be less than the variable cost of operatingthe business. (If nothing else, the opportunity cost of his time for aday is probably more than the revenue from one Coke.) But his pointis important: He has to pay the rent and most utilities anyway (thefixed cost), so all he needs to do is cover variable cost.Q: How would his decision be affected if his fixed costs were evenCo mee costave,tiesар-ev-sthigher?8.14ANational Park OurWe are driving up to see the crater of Haleakala on Maui, Hawaii, do any-I finally watched the Johnny Depp version of Charlie and the Choco-cost? Taking the market price as given, show the old and newer week spentors the larger firms; if thereQ: Draw a marginal cost curve for a Turkish rug-dealer before theas the pro-of students iningway? The onIare some economies of scale in this industry anyway, this justmoves the bottom of the average total cost curve still farther torator, explaining why Charlie's father is out of work, says tsubsidy is instituted. How would the subsidy change the marginals grade in theer weekin class. Thìsightray a marginal cost curve for a Turkish rug-dealer before thespentost? Taking the market price as given, show the old andga grade ine) and timequantities produced.1lly watched the Johnny Depp version of Charlie and the Choco-te Factory yesterday with several grandsons. At one point the nar-cator, explaining why Charlie's father is out of work, says that withll the sales of chocolate bars there are more cavities, more tooth-paste sold, and with the profits the toothpaste makers (Charlie's fa-ther's employer) have put in a lot of machinery. Presumably thecompany is making more toothpaste; but there is no necessary rea-son to use more capital and less labor. Substitution would occur iflabor became relatively more expensive; but that hasn't happened.It must be the case (in the movie) that the technology for produc-ing toothpaste is such that it is much, much cheaper to producelarge amounts of toothpaste with fewer workers, and much morecapital, than are used to produce small amounts.f each houral, the pro-7.17as thepro-en: Amonge than theades withbit more.productld haveA heart-res didet by aQ: Draw a curve for the marginal product of capital in thetoothpaste industry.your

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8.13 The entire city was essentially shut down for the past two days be- use of an ice storm. (Texans aren't used to driving on icy roads; the oads aren't well de-iced; and the hills make driving especially haz- ardous.) A local restaurateur, whose business was open yesterday, said, "With the low cost of being here, anything we make is fine." Now that cannot be entirely true. If he sells one Coke in 8 hours, surely the revenue will be less than the variable cost of operating the business. (If nothing else, the opportunity cost of his time for a day is probably more than the revenue from one Coke.) But his point is important: He has to pay the rent and most utilities anyway (the fixed cost), so all he needs to do is cover variable cost. Q: How would his decision be affected if his fixed costs were evem higher?

8.13 The entire city was essentially shut down for the past two days be- use of an ice storm. (Texans aren't used to driving on icy roads; the oads aren't well de-iced; and the hills make driving especially haz- ardous.) A local restaurateur, whose business was open yesterday, said, "With the low cost of being here, anything we make is fine." Now that cannot be entirely true. If he sells one Coke in 8 hours, surely the revenue will be less than the variable cost of operating the business. (If nothing else, the opportunity cost of his time for a day is probably more than the revenue from one Coke.) But his point is important: He has to pay the rent and most utilities anyway (the fixed cost), so all he needs to do is cover variable cost. Q: How would his decision be affected if his fixed costs were evem higher?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 41P: A computer company produces affordable, easy-to-use home computer systems and has fixed costs of...

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A computer company produces affordable, easyto-use home computer systems and has fixed costs of$250. The marginal cost of producing computers is $700for the first computer, $250 for the second, $300 for thethird, $350 for the fourth, $400 for the fifth, $450 for thesixth, and $500 for the seventh.a. Create a table that shows the company’s output,total cost, marginal cost, average cost, variablecost, and average variable cost.b. At what price is the zero-profit point? At whatprice is the shutdown point?c. If the company sells the computers for $500, is itmaking a profit or a loss? How big is the profitor loss? Sketch a graph with AC, MC, and AVCcurves to illustrate your answer and show theprofit or loss.d. If the firm sells the computers for $300, is itmaking a profit or a loss? How big is the profitor loss? Sketch a graph with AC, MC, and AVCcurves to illustrate your answer and show theprofit or loss.
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