Total Cost (TC) S2.00 6.50 10.00 13.00 15.50 17.50 19.00 21.00 24.00 Price Ciaba
ID: 1103986 • Letter: T
Question
Total Cost (TC) S2.00 6.50 10.00 13.00 15.50 17.50 19.00 21.00 24.00 Price Ciabatta Bread Sold Per Hour (Q) S6.00 5.50 5.00 4.50 4.00 3.50 3.00 2.50 2.00 a. To maximize profits, Maria should sellloaves of ciabatta bread per hour. (Enter your response as an integer) Maria should charge a price of $1 (Enter your response rounded to two decimal places.) Maria's maximum profit is (Enter your response rounded to two decimal places.) b. The marginal revenue when slling the profit-maximizing number of loaves of ciabatta bread is$ (Enter your response rounded to two decimal places.) The marginal cost when selling the profit-maximizing number of loaves of ciabatta bread is (Enter your response rounded to two decimal places.) c. In the long run, Maria A. O B. cannot expect to continue making profits. must lower her costs if she wants to continue making profits. rofits. C. can expect D. must advertise if she wants to make profits. to continue making pExplanation / Answer
Ans:
Profit maximizing quantity is where marginal revenue is equal to marginal cost
Table
a) To maximize profit, maria should sell 4 loaves of ciabatta bread per hour
b) maria should charge a price of $4
c) B.must lower her cost if she wants to continue making profits
2) Option C
The income effect will increase consumption of the good and the substitution effect will decrease its consumption.
Quantity Price($) Total Revenue($) Margina revenue($) Total cost($) Marginal Cost($) 0 6 0 0 2 2 1 5.5 5.5 5.5 6..5 4.5 2 5 10 4.5 10 3.5 3 4.5 13.5 3.5 13 3 4 4 16 2.5 15.5 2.5 5 3.5 17.5 1.5 17.5 2 6 3 18 0.5 19 1.5 7 2.5 17.5 -0.5 21 2 8 2 16 -1 24 3