1. Your roommate's long hours in chem lab finally paid off--she discovered a secret formula that lets people do an hour's worth of studying in 5 minutes. So far, she's sold 200 doses and faces the following average-total-cost schedule:
Q = 199 & ATC = $199
Q = 200 & ATC = 200
Q = 201 & ATC = 201

If a new customer offers to pay your roommate $300 for one dose, should she make one more? Explain.

Would the answer be yes because to produce one more would cost $202 which is less than the $300 the customer is willing to pay.

3. You go out to the best restaurant in town and order a lobster, you realize that you are quite full. Your date wants you to finish your dinner because you can't take it home and because "you've already paid for it" What should you do?

Isn't because I am full that the remaining amount of lobster is a sunk cost. So it is best to let it go and not eat it.

10. An industry currently has 100 firms, all of which have fixed cost of $16 and average variable cost as follows:
Quantity / Average variable cost: (1/$1),(2,$2), (3,$3), (4,$4), (5,$5), and (6,$6)
As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will the quantity demanded rise or fall? Will the quantity supplied by each firm rise or fall?

1) She should produce whenever Marginal Revenue > Marginal cost. MR=300. What is Marginal Cost?

if Q=199 and ATC=199 then Total Cost TC = 199*199=39601.
When Q=200,ATC=200 then TC = 40000, Thus MC=40000-39601 = 399.
When Q=201,ATC=201 then TC=40401. Thus MC=401.
Now, what do you think the roomate should do?

3) I agree with your answer.

10) Good problem. First construct a marginal cost curve for a firm. (Same procedure as in 1 above).
Next, determine the break-even point for your firm. That is, at what price will the firm have zero net profits.

By my calculations, firms break even at P=$8. At P=8, each of the firms will produce 4 units. So, total revenue = 4*8=32. AVC=4*4=16 and fixed costs=16.

Your question says nothing about the current (short-run) price. So, lets assume. If Price < $8, then firms will be in a loss situation. Some will drop out, shifting the supply curve inward. Quantity demanded will fall, price will rise (to $8).
If Price > $8 then firms will enjoy an economic profit. More firms will enter (assuming they have the same cost structures). Supply shifts out, Price goes down, quantity demanded goes up, each firm's output will either fall are stay the same.

  1. 👍
  2. 👎
  3. 👁
  1. 2. A company is considering building a bridge across a river. The bridge would cost $2 million to build and nothing to maintain. The following table shows the company¡¯s anticipated demand over the lifetime of the bridge:

    Price per crossing ($) 8 7 6 5 4 3 2 1 0
    Number of crossings (¡®000) 0 100 200 300 400 500 600 700 800

    a. If the company were to build the bridge, what would be its profit-maximizing price? Would that be the efficient level of output? Why or why not?
    b. If the company is interested in maximizing profit, should it build the bridge? What would be its profit or loss?
    c. If the government were to build the bridge, what price should it charge?
    d. Should the government build the bridge? Explain your answer.

    1. 👍
    2. 👎
  2. dfoeimzcs hqlt tosk ubfdhl xhdrwzue gxufwmd hfiub

    1. 👍
    2. 👎
  3. µØ·½

    1. 👍
    2. 👎

Respond to this Question

First Name

Your Response

Similar Questions

  1. algebra

    Joan is paid 11/2 hours for every hour she works on Saturday and 2 hours for every hour worked on Sunday; she is paid regular time for the rest of the week. How many hours will she be paid for if she works 40 hours during the

  2. Mathematics

    Khanya builders are paid R480 for 8 hours of work,while rex builders are paid R660 for 12 hours of work.Which company is paid the higher rate

  3. Statistics

    The time per week a student uses a lab computer is normally distributed, with a mean of 6.2 hours and a standard deviation of 0.9 hour. A student is randomly selected. a. Find the probability that a student uses a lab computer

  4. chemistry

    Three bottles of aqueous solutions are discovered in an abandoned lab. The solutions are green, yellow and purple. It is known that three complex ions of chromium (III) were commonly used in that lab: [Cr(H2O)6]3+, [Cr(NH3)6]3+,

  1. Math

    Susie spent 4 1/4 hours on Monday and 3 5/8 hours on Tuesday working on a history project. About how long did she spend working on the project? a. 1 hour b. 7 hours c. 8 hours d. 9 hours Answer: 8 hours I first found the common

  2. Economics

    2) An example of a government transfer of funds would include 1) wages paid to the President as part of his salary. 2) Social Security paid to retired department of defense workers.*** 3) funds paid to secret service agents who

  3. Math

    Sonja is paid $42.50 per hour as a veterinarian. She is paid 1 1/2 times the regular rate for all time exceeding 7 1/2 hours in a day or 37 1/2 hours per week. Work on a statutory holiday is paid at double time. What were her

  4. Statistics/Probability

    1. Two roommates, roommate A and roommate B, are about to go cruising with a mutual friend and are arguing over who gets to sit in the front seat. Roommate A suggests a game of rock-paper-scissors to settle the dispute. Consider

  1. medical Coding

    Can someone tell me if I coded this right. This 23-year-old female is brought to the emergency department after being found by her college roommate. Sometime within the last hour and a half after the roommate left, the patient

  2. Statistics/Probability

    2. Two roommates, roommate X and roommate Y, are expecting company and are arguing over who should have to wash the dishes before the company arrives. Roommate X suggests a game of rock-paper-scissors to settle the dispute.

  3. physics

    A proper lifetime of a certain particle is 100.0ns. a) How long does it live in the lab frame if it moves at V=0.960c? b) How far does it travel in the lab during that time? c) What is the distance travelled in the lab frame

  4. AP Chemistry

    So... this is the question which is from AP chem 2006 past paper. Suppose that a stable element with atomic number 119, symbol Q, has been discovered. a) write down the ground-state electron configuration of Q, showing only the

You can view more similar questions or ask a new question.