Please for question 58 answer A B C and explain and the payoffs (measured profit
ID: 1099970 • Letter: P
Question
Please for question 58 answer A B C and explain
and the payoffs (measured profit for the month, in thousands) from their choices). These are depicted in the payoff matrix in the usual (row, column) format. Based upon this information: Determine the best responses for Hallmart and Bullseye; BE SURE TO SHOW ALL WORK Find the Nash equilibrium (if it exists); Is there a dominant strategy? Explain briefly. Would there be something that Hallmart and Bullseye could do to improve their situation? Be sure to note any problems that might arise if they resort to this option. Explain. Price per Latte The above graph represents Celestial Dollars coffee, the only coffee shop in Tuscaloosa. Using the figure above, answer the following questions. Based on the above diagram, what is Celestial Dollars' profit maximizing level of output and what price does they charge for their specialty, a mocha latte? Based on the above diagram, what is Celestial Dollars' total revenue and total cost? Given the quantity and price you obtained in part A calculate the profit or loss Celestial Dollars receives.Explanation / Answer
A) The profit Maximising level of ourput occurs on the graph where MR=MC (Marginal Revenue=Marginal Cost). To answer this question find the point where MR and MC cross and draw a vertical line. The point at which MR= MC is at the output of 40. To find the price you will draw a horizontal line from your point where MR=MC. The price at this output looks like it is $1.80 (estimate).
B) From the vertical line you drew in part A which goes through the point where marginal revenue= marginal cost you will now locate where it crosses the ATC curve(Average total cost ) This occurs at the dollar value of 2.50. We now know that the average total cost per cup of coffee so we simply times it by the output which is 40 (from part A) Total Cost= $2.50*40 cups of coffee=$100 Total Cost. We already obtained all the information we need to answer what the total revenue in part A. We just need to multiply $1.80*40 cups of coffee= $72 Total Revenue
C) Since we know both the total revenue and total cost it is easy to calculate profit or loss. We simply take Total Revenue-Total Cost= 72-100= $28 loss
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