The town of Whoville has 100 identical consumers and 50 identical car washes.Each consumer has an income of $24. The following diagram and chart showthe indifference curves of a typical consumer and the marginal cost curve of atypical car wash.All Other GoodsCar Washes121234CONSUMER'S INDIFFERENCE CURVESa) Construct the Demand Curveb) Construct the short-run cost curvesc)Construct the short-run industry curved) Construct the long-run industry supply curvee) Suppose 50 more identical consumers show upQuantityMC10FIRM'S MARGINAL COSTS

a) Construct the Demand Curve: The demand curve reflects the quantities of car washes that consumers…

a) Construct the Demand Curve b) Construct the short-run cost curves c) Construct the short-run industry curve d) Construct the long-run industry supply curve e) Suppose 50 more identical consumers show up

a) Construct the Demand Curve b) Construct the short-run cost curves c) Construct the short-run industry curve d) Construct the long-run industry supply curve e) Suppose 50 more identical consumers show up

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The town of Whoville has 100 identical consumers and 50 identical car washes.
Each consumer has an income of $24. The following diagram and chart show
the indifference curves of a typical consumer and the marginal cost curve of a
typical car wash.
All Other Goods
Car Washes
12
1234
CONSUMER'S INDIFFERENCE CURVES
a) Construct the Demand Curve
b) Construct the short-run cost curves
c)
Construct the short-run industry curve
d) Construct the long-run industry supply curve
e) Suppose 50 more identical consumers show up
Quantity
MC
10
FIRM'S MARGINAL COSTS

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