Musashi owns and operates a hot dog stand in downtown Chicago. In order to operate his hot dog stand, regardless of the number of hot dogs sold, Musashi must purchase a permit from the local government in Chicago. Musashi's initial profit hill is plotted in green (triangle symbols) on the following graph. Suppose the price Musashi must pay for a permit increases by $80 per day. On the following graph, use the purple diamond symbols to plot Musashi's new profit hill, for 0, 10, 20, 30, 40, 50, 60, and 70 hot dogs, after the increase in the price of a permit (with all other factors remaining constant). Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. TOTAL PROFIT (Dollars per day) 400 350 300 250 200 150 100 50 -50 -100 -150 -200 0 10 20 30 40 50 60 QUANTITY (Hot dogs per day) 70 Initially, Musashi's profit-maximizing level of output is level of output is hot dogs per day. Initial Profit Hill 80 New Profit Hill Based on the graph, you can tell that Musashi initially faces a fixed cost of $ (?) per day. hot dogs per day. After the price of a permit rises, Musashi's profit-maximizing

Musashi owns and operates a hot dog stand in downtown Chicago. In order to operate his hot dog stand, regardless of the number of hot dogs sold, Musashi must purchase a permit from the local government in Chicago. Musashi's initial profit hill is plotted in green (triangle symbols) on the following graph. Suppose the price Musashi must pay for a permit increases by $80 per day. On the following graph, use the purple diamond symbols to plot Musashi's new profit hill, for 0, 10, 20, 30, 40, 50, 60, and 70 hot dogs, after the increase in the price of a permit (with all other factors remaining constant). Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. TOTAL PROFIT (Dollars per day) 400 350 300 250 200 150 100 50 -50 -100 -150 -200 0 10 20 30 40 50 60 QUANTITY (Hot dogs per day) 70 Initially, Musashi's profit-maximizing level of output is level of output is hot dogs per day. Initial Profit Hill 80 New Profit Hill Based on the graph, you can tell that Musashi initially faces a fixed cost of $ (?) per day. hot dogs per day. After the price of a permit rises, Musashi's profit-maximizing

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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