Delvin has a hot dog stand in a busy midtown area with similar stands on every block. The graph above shows the cost curves of Delvin’s Hot Dogs. The market price of a hot dog is $3. Answer the questions below and show all calculations where necessary. From the diagram, what is Delvin’s profit-maximizing output per day? Explain your answer. Calculate Delvin’s accounting profit per day. How will Delvin’s price and profit change in the long-run, assuming no change in technology or demand? $price/cost654321100200 300MCATC400500Qty (hot dogs per day

A perfect competitive firm is a firm that operates in a perfectly competitive market.In a perfectly…

Answered: Delvin has a hot dog stand in a busy…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Delvin has a hot dog stand in a busy midtown area with similar stands on every block. The graph above shows the cost curves of Delvin’s Hot Dogs. The market price of a hot dog is $3. Answer the questions below and show all calculations where necessary.

From the diagram, what is Delvin’s profit-maximizing output per day? Explain your answer.
Calculate Delvin’s accounting profit per day.
How will Delvin’s price and profit change in the long-run, assuming no change in technology or demand?

$price/cost
6
5
4
3
2
1
100
200 300
MC
ATC
400
500
Qty (hot dogs per day

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