Restaurant Pricing. Consider a restaurant that charges $10 for all you can eat and has 25 customers at this price. The slope of the demand curve is $0.10 per meal, and the marginal cost of providing a meal is $6. Hint: The y-intercept equals the charge plus the (absolute value of the slope x the number of customers), and the x-intercept equals the y-intercept divided by the slope. 1.) Use the line drawing tool to draw and label the demand line. 2.) Use the line drawing tool to draw and label the marginal revenue line. 3.) Use the line drawing tool to draw the marginal cost line. Carefully follow the instructions above, and only draw the required objects. The profit-maximizing quantity is meals. (Enter your response rounded to the nearest unit.) The profit-maximizing price is $. (Enter your response rounded to the nearest dollar.) ---- Price per meal $16 $14- $12- $10- $8- $6- $4- $2- $0+ 0 20 40 60 80 100 Quantity of meals 120 140 o Q

Restaurant Pricing. Consider a restaurant that charges $10 for all you can eat and has 25 customers at this price. The slope of the demand curve is $0.10 per meal, and the marginal cost of providing a meal is $6. Hint: The y-intercept equals the charge plus the (absolute value of the slope x the number of customers), and the x-intercept equals the y-intercept divided by the slope. 1.) Use the line drawing tool to draw and label the demand line. 2.) Use the line drawing tool to draw and label the marginal revenue line. 3.) Use the line drawing tool to draw the marginal cost line. Carefully follow the instructions above, and only draw the required objects. The profit-maximizing quantity is meals. (Enter your response rounded to the nearest unit.) The profit-maximizing price is $. (Enter your response rounded to the nearest dollar.) ---- Price per meal $16 $14- $12- $10- $8- $6- $4- $2- $0+ 0 20 40 60 80 100 Quantity of meals 120 140 o Q

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Restaurant Pricing. Consider a restaurant that charges $10 for all
you can eat and has 25 customers at this price. The slope of the
demand curve is - $0.10 per meal, and the marginal cost of
providing a meal is $6.
Hint: The y-intercept equals the charge plus the (absolute value of
the slope x the number of customers), and the x-intercept equals the
y-intercept divided by the slope.
1.) Use the line drawing tool to draw and label the demand line.
2.) Use the line drawing tool to draw and label the marginal revenue
line.
3.) Use the line drawing tool to draw the marginal cost line.
Carefully follow the instructions above, and only draw the required
objects.
The profit-maximizing quantity is meals. (Enter your response
rounded to the nearest unit.)
The profit-maximizing price is $. (Enter your response rounded to
the nearest dollar.)
Price per meal
$16
$14
$12-
$10-
$8-
$6-
$4-
$2-
so+
-O
0
20
-9
80
60
Quantity of meals
100
120 140
Q
N

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There is a bar on Off‐Main Street called the Rock‐n‐Roll Bar. All the people that go to that bar like to listen to rock‐n‐roll music, and they love live bands. If the bar owner brings bands in to play music on a Saturday night, she will make a lot of money. However there are tenants in this building who get annoyed by the loud music. The benefits/costs to the owner/tenants of having zero, one, two or three bands on a Saturday night are listed below. If the tenants have the right to be free of loud music enforced through aproperty rule, how many bands will play in Rock‐n‐Roll Bar on a Saturday night? A. ZeroB. OneC. TwoD. ThreeE. It depends on transaction costs
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