The LEGO Architecture Collection includes three items: the White House Model Building Kit (at $80 per kit), the U.S. Capitol Building Kit (at $40 per kit), and me Mar-a-LEGO Club Building Kit (at $20.24 per kit; empty classified document folders re extra). Total costs of production for different quantities of each item are given below. WHITE HOUSE Output per day 0 100 200 300 400 500 600 Total cost 1600 5000 11000 18000 27000 40000 55000 U.S. CAPITOL Output per day 0 10 20 30 40 50 60 Total cost 100 400 750 1120 1510 1920 2350 MAR-A-LEGO Output per day 0 100 200 300 400 500 600 Total cost 2000 3500 5500 8000 11000 14200 15000 If LEGO's goal is profit maximization and the cost of production schedules cannot be altered, what quantity of each item should be produced in the short run?

The LEGO Architecture Collection includes three items: the White House Model Building Kit (at $80 per kit), the U.S. Capitol Building Kit (at $40 per kit), and me Mar-a-LEGO Club Building Kit (at $20.24 per kit; empty classified document folders re extra). Total costs of production for different quantities of each item are given below. WHITE HOUSE Output per day 0 100 200 300 400 500 600 Total cost 1600 5000 11000 18000 27000 40000 55000 U.S. CAPITOL Output per day 0 10 20 30 40 50 60 Total cost 100 400 750 1120 1510 1920 2350 MAR-A-LEGO Output per day 0 100 200 300 400 500 600 Total cost 2000 3500 5500 8000 11000 14200 15000 If LEGO's goal is profit maximization and the cost of production schedules cannot be altered, what quantity of each item should be produced in the short run?

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

The LEGO Architecture Collection includes three items: the White House Model
Building Kit (at $80 per kit), the U.S. Capitol Building Kit (at $40 per kit), and
the Mar-a-LEGO Club Building Kit (at $20.24 per kit; empty classified document folders
are extra). Total costs of production for different quantities of each item are given below.
a.
WHITE HOUSE
Output
per day
0
100
200
300
400
500
600
White House
U.S. Capitol
Total
cost
Mar-a-LEGO
1600
5000
11000
18000
27000
40000
55000
U.S. CAPITOL
Output
per day
0
10
20
30
40
50
60
Total
cost
100
400
750
1120
1510
1920
2350
MAR-A-LEGO
Output
per day
0
100
200
300
400
500
600
If LEGO's goal is profit maximization and the cost of production schedules
cannot be altered, what quantity of each item should be produced in the short run?
Total
cost
2000
3500
5500
8000
11000
14200
15000
b. Above what market price (to the nearest penny) should LEGO begin producing
Mar-a-LEGO kits? That is, what is the "shutdown price" for Mar-a-LEGO kits?

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