Suppose Miriam sets a single price but also charges Shane an entry fee before he can buy any donuts Provide answers and include a couple of sentences providing an explanation for your answer. a. If Miriam trying to maximize her producer surplus, where will she set the price and entry fee, and how many donuts will she sell? b. Does your answer to (a.) violate our result that profit is maximized by setting the quantity where marginal revenue equals marginal cost? Number of Donuts Shane's Marginal Value Miriam's Marginal Cost 1 $1.70 $0.90 2 $1.60 $0.95 3 $1.50 $1.00 4 $1.40 $1.05 5 $1.30 $1.10 6 $1.20 $1.15 7 $1.10 $1.20 8 $1.00 $1.25 9 $0.90 $1.30 10 $0.80 $1.35 11 $0.70 $1.40 12 $0.60 $1.45 13 $0.50 $1.50
Suppose Miriam sets a single price but also charges Shane an entry fee before he can buy any donuts Provide answers and include a couple of sentences providing an explanation for your answer. a. If Miriam trying to maximize her producer surplus, where will she set the price and entry fee, and how many donuts will she sell? b. Does your answer to (a.) violate our result that profit is maximized by setting the quantity where marginal revenue equals marginal cost? Number of Donuts Shane's Marginal Value Miriam's Marginal Cost 1 $1.70 $0.90 2 $1.60 $0.95 3 $1.50 $1.00 4 $1.40 $1.05 5 $1.30 $1.10 6 $1.20 $1.15 7 $1.10 $1.20 8 $1.00 $1.25 9 $0.90 $1.30 10 $0.80 $1.35 11 $0.70 $1.40 12 $0.60 $1.45 13 $0.50 $1.50
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Suppose Miriam sets a single
a. If Miriam trying to maximize her
b. Does your answer to (a.) violate our result that profit is maximized by setting the quantity where marginal revenue equals marginal cost?
| Number of Donuts | Shane's Marginal Value | Miriam's Marginal Cost |
| 1 | $1.70 | $0.90 |
| 2 | $1.60 | $0.95 |
| 3 | $1.50 | $1.00 |
| 4 | $1.40 | $1.05 |
| 5 | $1.30 | $1.10 |
| 6 | $1.20 | $1.15 |
| 7 | $1.10 | $1.20 |
| 8 | $1.00 | $1.25 |
| 9 | $0.90 | $1.30 |
| 10 | $0.80 | $1.35 |
| 11 | $0.70 | $1.40 |
| 12 | $0.60 | $1.45 |
| 13 | $0.50 | $1.50 |
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