Chapter 11, Problem 1FT

Subpart (a):

To determine

Relationship between price, marginal cost, and output.

Explanation of Solution

The price of waffles per box $(4)$ is greater than the marginal cost $(2)$, therefore, the Waffle Co should produce more generic-brand frozen waffles.

Economics Concept Introduction

Concept Introduction:

Marginal Cost: Marginal cost is the additional cost incurred by the firm by producing an extra per unit of output.

Subpart (b):

To determine

Relationship between price, marginal cost, and output.

Explanation of Solution

The price of copper per ounce $(32)$ is less than the marginal cost $(45)$, therefore, Rio Blanco should produce less copper.

Economics Concept Introduction

Concept Introduction:

Marginal Cost: Marginal cost is the additional cost incurred by the firm by producing an extra per unit of output.

Subpart (c):

To determine

Relationship between price, marginal cost, and output.

Explanation of Solution

The price per website $(5)$ is greater than the marginal cost $(2)$, therefore, GoDaddy.com should register more domain names.

Subpart (d):

To determine

Relationship between price, marginal cost, and output.

Explanation of Solution

The price per month $(80)$ is less than the marginal cost $(120)$ per month; therefore, Luke Lawn Service should do less lawn service per month.