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 12 86 MC AC AR 25 36 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

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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21
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
12
86
MC
AC
AR
25
36
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 12 86 MC AC AR 25 36 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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