Paul's firm produces the same good as Sal's firm. The total cost of producing qp units in Paul's firm is Cp( qp ) = 7.6 qp + 2.2. The total cost of producing qs units in Sal's firm is Cs( qs ) = 7.6 qs + 2.2. What is the efficiency loss if each person's firm produces half of a total of 595 units?
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Paul's firm produces the same good as Sal's firm.
The total cost of producing qp units in Paul's firm is Cp( qp ) = 7.6 qp + 2.2.
The total cost of producing qs units in Sal's firm is Cs( qs ) = 7.6 qs + 2.2.
What is the efficiency loss if each person's firm produces half of a total of 595 units?
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- You and a group of friends are planning to visit a theme park, which charges $60 for admission, $80 for a two day pass, and $90 for a three day pass. You're friends are interested in spending a lot of time there, but they're worried about paying a lot of money. You explain the concept of marginal cost, which helps them see that the additional day is a good value. Part 1 The average cost per day of a three-day pass is $________ per person The marginal cost of adding the third day is $______ per person Part 2 If there are 6 people in your group, the groups marginal cost of switching from the two-day pass to the three-day pass is $ _______Northside Social (NS) sells cups of coffee and amazing breakfast sandwiches. The current price of a cup of coffee is $3.00 and the current price of an amazing breakfast sandwich is $8.00. At those prices, NS sells 1000 cups of coffee and 200 breakfast sandwiches daily. NS faces a constant marginal cost for each cup of coffee of 50 cents and the constant marginal cost of breakfast sandwiches is $2. NS increases the price of coffee 5%, to $3.15. After the price increase, NS sells 900 cups of coffee, a decrease of 10% in cups of coffee. Assuming the above, what if NS also changes the price of breakfast sandwiches from $8 to $10 (a 25% increase in price) and that the number of breakfast sandwiches sold decreases from 200 to 180 (a 10% decrease in quantity). Which of the following is true? A) Coffee profits and breakfast sandwich profits increase.B) Coffee profits decrease by more than breakfast sandwich profits decrease.C) Coffee profits decrease by more than breakfast sandwich profits…A company markets two products. The quantities of these two products are x and y. Both products are priced at $60 and the productive capacity for both products together is 30. The total cost of the firm is C (x, y) = x² + xy + y². Find the production levels of x and y which maximize profit. What is the maximum profit? Prove that profit is maximized.
- 6.the cost of producing a bottle of zlurp is 1.50, and the competitive suppliers sell it at this price. Each whovillian will consumeA firm has a fixed production cost of $4000. For the first 100 units of production, the firm has a marginal cost of $50 per unit produced. Producing more than 100 units has a marginal cost of $70 per unit produced. The firm cannot produce more than 150 units. How much does it cost to produce at q=0? at q=50? at q=100? at q=125? at q=150? Graph the firm’s marginal cost function
- Beta Industries manufactures floppy disks that consumers perceive as identical to those produced by numerous other manufacturers. Recently, Beta hired an econometrician to estimate its cost function for producing boxes of one dozen floppy disks. The estimated cost function is C = 20 + 2Q^2. a. What are the firm's fixed costs? b. What is the firm's marginal cost? Now suppose other firms in the market sell the product at a price of $10 c. How much should this firm charge for the product? d. What is the optimal level of output to maximize profits? e. How much profit will be earned? f. In the long run, should this firm continue to operate or shut down? Why? *Please show all work*A perfectly competitive firm sells its good for $20. If marginal cost is four times the quantity produced, how much does the firm produce? Why? Assuming perfect competition, there is not enough information to determine how much the firm is producing. Assuming perfect competition, the firm is producing where MC is twice MR. If the price is $20, then MC is $40. This means that the firm is producing 10 units. Assuming perfect competition, the firm is producing where MR = MC. If the price is $20 and MC is four times the quantity, it is producing 80 units. Assuming perfect competition, the firm is producing where MR = MC = P. Since price is $20, MR is $20. If MC is 4 times the quantity, it is producing 5 units.Exercise 2.7 (P&R, chap. 8, p. 326: Exercise12) A number of stores offer film developing as a service to their customers. Suppose that each store offering this service has a cost function C(q) = 50+ 0.5q +0.08q² and a marginal cost MC = 0.5 + 0.16q. a) If the going rate for developing a roll of film is €8.50, is the industry in long-run equilibrium? If not, find the price associated with long-run equilibrium. b) Suppose now that a new technology is developed which will reduce the cost of film developing by 25 percent. Assuming that the industry is in long-run equilibrium, how much would any one store be willing to pay to purchase this new technology?
- Suppose that the profit from the sale of Kisses and Kreams is given by the following, where x is the number of pounds of Kisses and y is the number of pounds of Kreams. P(x, y) = 10x + 6.6y - 0.001x² -0.025y² dollars You know from previous experience that, for such a profit function, profit will be maximized at the critical point of P(x,y). (a) Determine the amounts of Kisses and Kreams that will maximize profit. pounds of Kisses pounds of Kreams (b) What is the maximum profit? (Round your answer to two decimal places.) $The last part of the questionA grape grower with a vineyard in the Edna Valley and in the Carneros appellation in Sonoma/Napa has a contract to produce 18 tons of pinot noir grapes for Gallo. The current allocation of the 18 tons results in a marginal cost of production in the Edna Valley vineyard of $800 (MCev = $800) and a marginal cost of production in the Carneros vineyard of $1200 (MCc = $1200). Explain whether the grower should move one ton of production from the Edna Valley to Carneros or vice versa. Make sure to provide a clear explanation of the outcome consistent with the idea of the equimarginal principle. Make sure to use the correct terms and units.
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