Mary Magnolia wants to open a flower shop, the Petal Pusher, in a new mall. She has her choice of three different floor sizes, 200 square feet, 500 square feet, or 1,000 square feet. The monthly rent will be $1 a square foot. Mary estimates that if she has F square feet of floor space and sells y bouquets a month, her variable costs will be c,(v) = y/2F per month. a. If she has 200 square feet of floor space, write down her marginal cost function and her average cost function. At what amount of output is average cost minimized? At this level of output, how much is average cost? b. If she has 500 square feet, write down her marginal cost function and her average cost function. At what amount of output is average cost minimized? At this level of output, how much is average cost? c. If she has 1,000 square feet of floor space, write down her marginal cost function and her average cost function. At what amount of output is average cost minimized? At this level of output, how much is average cost?

Mary Magnolia wants to open a flower shop, the Petal Pusher, in a new mall. She has her choice of three different floor sizes, 200 square feet, 500 square feet, or 1,000 square feet. The monthly rent will be $1 a square foot. Mary estimates that if she has F square feet of floor space and sells y bouquets a month, her variable costs will be c,(v) = y/2F per month. a. If she has 200 square feet of floor space, write down her marginal cost function and her average cost function. At what amount of output is average cost minimized? At this level of output, how much is average cost? b. If she has 500 square feet, write down her marginal cost function and her average cost function. At what amount of output is average cost minimized? At this level of output, how much is average cost? c. If she has 1,000 square feet of floor space, write down her marginal cost function and her average cost function. At what amount of output is average cost minimized? At this level of output, how much is average cost?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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