Willingness to pay (S) for one papadum 17.00 Buyer Lincoln Jefferson Franklin Washington 15.00 9.00 3.00

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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The following Table refers to four buyers’ willingness to pay for papadums. Each buyer is willing to buy at most one papadum and no more.

 

Assume now that there is only a single seller of papadums, and she knows each buyer’s willingness to pay. Assume that this seller incurs a cost of $4.00 per unit of papadum produced (i.e., the marginal cost is constant). If she intends to maximise profits, how many papadums would this seller supply to the market, and what price would she charge?

Table 1
Willingness to pay (S) for one
papadum
17.00
Buyer
Lincoln
Jefferson
15.00
Franklin
9.00
Washington
3.00
Transcribed Image Text:Table 1 Willingness to pay (S) for one papadum 17.00 Buyer Lincoln Jefferson 15.00 Franklin 9.00 Washington 3.00
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