A local pizza shop has hired you as a consultant to help it compete with national chains in the area. Because most business is handled by these national chains, the local shop operates as a price taker. Using historical data on costs, you find that short-run total costs each day are given by STC = 10 + q + 0.1q^2, where q is daily pizza production. a. What is this pizza shop’s short-run supply curve? b. If the market price is $5.00, what is the pizza shop’s daily production quantity and profits? c. Suppose the pizza shop wants to know the lowest price such that it can break even (i.e., maintaining a net profit of zero). Please help the firm find this price

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

A local pizza shop has hired you as a consultant to help it compete with national chains in
the area. Because most business is handled by these national chains, the local shop operates as
a price taker. Using historical data on costs, you find that short-run total costs each day are
given by
STC = 10 + q + 0.1q^2,
where q is daily pizza production.
a. What is this pizza shop’s short-run supply curve?
b. If the market price is $5.00, what is the pizza shop’s daily production quantity and
profits?
c. Suppose the pizza shop wants to know the lowest price such that it can break
even (i.e., maintaining a net profit of zero). Please help the firm find this price

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 5 steps with 12 images

Blurred answer
Knowledge Booster
Profits
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education