a. How much should George charge if he must charge a single price to all customer? At this price, how many portraits will George produce each day? What will be his economic profit? b. How much consumer surplus is generated each day at this price? TotsPoses Inc., a profit-maximizing business, is the onlyphotography business in town that specializes in portraits ofsmall children. George, who owns and runs TotsPoses,expects to encounter an average of eight customers per day,each with a reservation price (shown in the followingtable). Assume George has no fixed costs, and his cost ofproducing each portrait is $12.Customer12345678Reservation price($ per photo)5046423834302622

The consumer surplus refers to the difference between the willingness of a buy to pay for a good and…

a. How much should George charge if he must charge a single price to all customer? At this price, how many portraits will George produce each day? What will be his economic profit? b. How much consumer surplus is generated each day at this price

a. How much should George charge if he must charge a single price to all customer? At this price, how many portraits will George produce each day? What will be his economic profit? b. How much consumer surplus is generated each day at this price

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 2.1CE

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Question 9
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