Suppose Melody owns a business giving piano lessons. Assume that the market for piano lessons is perfectly competitive and that theequilibrium price of a piano lesson is $20. Melody's total costs vary depending on the number of piano lessons she offers each day, asshown in the table below.Number of lessons Total cost per dayper day($)0301502683784965115613816820878a. When Melody gives 3 lessons per day, what is her average variable cost?b. What is the profit-maximizing number of lessons for Melody to give each day?lessons per dayc. What is Melody's daily economic profit at her profit-maximizing number of lessons?Instructions: If you are entering a negative number, be sure to include a negative sign (-).+A d. Should Melody shut down?No. Melody should not shut down.Yes. Melody should shut down.e. If Melody's fixed cost rises, then what will happen to her profit-maximizing number oflessons?O There would be a decrease in the number of lessons.There would be no change.O There would be an increase in the number of lessons.

(a) AVC = 16(b) Q = 5(c) Profit = - 15 (Please put the negative sign, do not forget) (d) Option (a)…

Answered: Suppose Melody owns a business giving…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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