Yann's bakery operates in a perfectly competitive market where the prevailing price for a baguette (his only product) is $3. Yann's marginal cost function is given by MC=0.1q: (i) Yann's profit-maximizing level of output is 30 (ii) Yann's variable profit is (iii) The producer surplus is 45 If Yann also has a fixed cost of $50, then: (iv) his total profit is -5
Yann's bakery operates in a perfectly competitive market where the prevailing price for a baguette (his only product) is $3. Yann's marginal cost function is given by MC=0.1q: (i) Yann's profit-maximizing level of output is 30 (ii) Yann's variable profit is (iii) The producer surplus is 45 If Yann also has a fixed cost of $50, then: (iv) his total profit is -5
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter11: Price And Output Determination: Monopoly And Dominant Firms
Section: Chapter Questions
Problem 3E
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![Yann's bakery operates in a perfectly competitive market where the prevailing price for a baguette (his only product) is $3. If
Yann's marginal cost function is given by MC=0.1q:
(i) Yann's profit-maximizing level of output is
30
(ii) Yann's variable profit is
(iii) The producer surplus is 45
If Yann also has a fixed cost of $50, then:
(iv) his total profit is
-5
Assuming Yann cannot avoid the fixed cost, Yann should](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F45f3e0a4-3f21-4962-8ad5-de454383f96a%2F6f498729-95f2-4648-96c5-fee902caa3d6%2Fh4x08b_processed.png&w=3840&q=75)
Transcribed Image Text:Yann's bakery operates in a perfectly competitive market where the prevailing price for a baguette (his only product) is $3. If
Yann's marginal cost function is given by MC=0.1q:
(i) Yann's profit-maximizing level of output is
30
(ii) Yann's variable profit is
(iii) The producer surplus is 45
If Yann also has a fixed cost of $50, then:
(iv) his total profit is
-5
Assuming Yann cannot avoid the fixed cost, Yann should
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