Modern Principles of Economics
Modern Principles of Economics
3rd Edition
ISBN: 9781429278393
Author: Tyler Cowen, Alex Tabarrok
Publisher: Worth Publishers
Question
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Chapter 11, Problem 1FT

Subpart (a):

To determine

Relationship between price, marginal cost, and output.

Subpart (a):

Expert Solution
Check Mark

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.

Subpart (b):

Expert Solution
Check Mark

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.

Subpart (c):

Expert Solution
Check Mark

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.

Subpart (d):

Expert Solution
Check Mark

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.

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