ience. (LO0 r day? 7. TotsPoses Inc., a profit-maximizing business, is the only photography business in town that specializes in por- traits of small 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 following table. Assume George has no fixed costs, and his cost of producing each portrait is $12. (LO4, LO5, LO6) 9. Serena is a in the sale of and marginal 60 Reservation price ($ per photo) Customer 50 50 1 45 40 46 2 42 30 38 34 5 20 30 15 26 10 22 0 a. How much should George charge if he must charge a single price to all customers? 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? c. What is the socially efficient number of portraits? d. George is very experienced in the business and knows the reservation price of each of his custom- ers. If he is allowed to charge any price he likes to any consumer, how many portraits will he produce each day and how much economic profit will he a. Relative at the se much co the mon price? b. How mu could a earn? monopol $ per ounce

ience. (LO0 r day? 7. TotsPoses Inc., a profit-maximizing business, is the only photography business in town that specializes in por- traits of small 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 following table. Assume George has no fixed costs, and his cost of producing each portrait is $12. (LO4, LO5, LO6) 9. Serena is a in the sale of and marginal 60 Reservation price ($ per photo) Customer 50 50 1 45 40 46 2 42 30 38 34 5 20 30 15 26 10 22 0 a. How much should George charge if he must charge a single price to all customers? 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? c. What is the socially efficient number of portraits? d. George is very experienced in the business and knows the reservation price of each of his custom- ers. If he is allowed to charge any price he likes to any consumer, how many portraits will he produce each day and how much economic profit will he a. Relative at the se much co the mon price? b. How mu could a earn? monopol $ per ounce

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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