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Mr Browns owns and operate a dog grooming. Figure 21.1 shows the cost and revenue curves for a pet grooming session. Initially, Mr Browns sets his price to maximise profits. Figure 21.1: Costs, Revenue per grooming session 17 17 12 220 MC AC AR MR Quantity of treatments per day Calculate the change in total supernormal profit if Mr Browns changes his objective from profit maximisation to revenue maximisation. a) -R225 b) -R117 c) R108 d) R125

Mr Browns owns and operate a dog grooming. Figure 21.1 shows the cost and revenue curves for a pet grooming session. Initially, Mr Browns sets his price to maximise profits. Figure 21.1: Costs, Revenue per grooming session 17 17 12 220 MC AC AR MR Quantity of treatments per day Calculate the change in total supernormal profit if Mr Browns changes his objective from profit maximisation to revenue maximisation. a) -R225 b) -R117 c) R108 d) R125

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 2.5CE
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Mr Browns owns and operate a dog grooming. Figure 21.1 shows the cost and revenue curves for a pet grooming session. Initially, Mr Browns sets his price to maximise profits. Figure 21.1: Costs, Revenue per grooming session 17 17 12 220 MC AC AR MR Quantity of treatments per day Calculate the change in total supernormal profit if Mr Browns changes his objective from profit maximisation to revenue maximisation. a) -R225 b) -R117 c) R108 d) R125
Transcribed Image Text:Mr Browns owns and operate a dog grooming. Figure 21.1 shows the cost and revenue curves for a pet grooming session. Initially, Mr Browns sets his price to maximise profits. Figure 21.1: Costs, Revenue per grooming session 17 17 12 220 MC AC AR MR Quantity of treatments per day Calculate the change in total supernormal profit if Mr Browns changes his objective from profit maximisation to revenue maximisation. a) -R225 b) -R117 c) R108 d) R125
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