Question 6Suppose a factory can be designed to produce either trucks or cars. The diagram belowshows the marginal cost and marginal benefit of producing trucks in terms of theforgone cars.MC432MB255075100Trucks (per day)i. What is the marginal benefit and marginal cost of producing 25th truck?ii. Should the 25th truck be produced? Why or why not.Marginal cost and marginal benefit(cars per truck)

An optimal level of production occurs at MB = MC. MB decrease as output increases MC increases as…

MC MB 25 50 75 100 Trucks (per day) i. What is the marginal benefit and marginal cost of producing 25th truck? ii. Should the 25th truck be produced? Why or why not. Marginal cost and marginal benefit (cars per truck)

MC MB 25 50 75 100 Trucks (per day) i. What is the marginal benefit and marginal cost of producing 25th truck? ii. Should the 25th truck be produced? Why or why not. Marginal cost and marginal benefit (cars per truck)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The owner of a skating rink rents the rink for parties at $1200 if 60 or fewer skaters attend, so that the cost per person is $20 if 60 attend. For each 5 skaters above 60, she reduces the price per skater by $0.50. (a) Construct a table that gives the revenue generated if 60, 70, and 80 skaters attend. No. of skaters Total Revenue 60 70 80 Price per Skater $ $ $ (b) Does the owner's revenue from the rental of the rink increase or decrease as the number of skaters increases from 60 to 80? O The revenue increases. O The revenue decreases. (c) Write the equation that describes the revenue for parties with x groups of five skaters more than 60 skaters. R(x) = (d) Find the number of skaters that will maximize the revenue. skaters (e) Find the maximum revenue. $ (f) When the revenue is at the maximum possible, what price is paid per skater? $
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PRICE (Dollars per room) 500 450 400 350 300 250 200 150 100 50 0 0 Demand + 50 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) Graph Input Tool Market for Oceans's Hotel Rooms Price (Dollars per room) Quantity Demanded (Hotel rooms per night) Demand Factors Average Income (Thousands of dollars) Airfare from DSM to ACY (Dollars per roundtrip) Room Rate at Meadows (Dollars per night) 300 200 40 200 rooms per night to ,hotel rooms at the Oceans and hotel rooms at the Meadows are 200 For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Oceans is charging $300 per room per night. If average household income increases by 50%, from $40,000 to $60,000 per year, the quantity of rooms demanded at the Oceans rooms per night to rooms per night. Therefore, the income elasticity of demand is Oceans are ? from meaning that hotel rooms at the If the price of a room at the Meadows were to decrease by 20%, from $200 to $160,…
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