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Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Question
Chapter 10, Problem 9MC
To determine
Cost reduction strategy.
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Students have asked these similar questions
A restaurant should not stay open for an additional hour if it's _exceeds_
a) average benefit; average cost
b) average cost; average benefit
c) marginal benefit; marginal cost
d) marginal cost; marginal benefit
I.
A company produces at an output level where marginal cost is equal to marginal revenue
and has the following revenue and cost levels:
Total revenue = $1,450
Total cost = $1,500
Total variable cost = $1,300
What would you suggest?
a. Shut down.
b. Continue to produce because the loss is less than the total fixed cost.
c. Increase production to lower the marginal cost.
e. Raise the price.
II.
At current long-run production levels, the marginal revenue of a competitive firm is $15 and
the marginal cost of the firm is $15. If the market is perfectly competitive, the firm should
a. cut back on production.
b. stop production all together.
c. produce more.
d. continue producing at current levels.
Rob quit his $4,000/month coffee shop position and started an ice-cream business. Rob does not get paid a salary for running the ice-cream business. When calculating the economic profit of the ice-cream business, his old $4,000 coffee shop salary is
Select one:
a. counted as part of the total revenue.
b. counted as part of the implicit costs.
c. counted as part of the explicit costs.
d. ignored.
Chapter 10 Solutions
Managerial Economics: A Problem Solving Approach
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Similar questions
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