Calvin grows beautiful orchids. His total fixed cost is $90 a day, and his average variable cost is $2 a plant. Few people know about Calvin's Orchids and he is maximizing his profit by selling 18 orchids a day for $7 a plant. Calvin thinks that if he spends $20 a day on advertising, he can increase his market and sell 48 orchids a day for $7 a plant. If Calvin advertises will his average total cost increase or decrease at the quantity produced? If Calvin advertises and as a result he sells 48 orchids a day for $7 a plant, his O A. average total cost decreases if total cost decreases, and increases if total cost increases O B. average total cost does not change at the quantity produced OC. average total cost increases at the quantity produced OD. average total cost decreases at the quantity produced

The following table contains different consumers' values for three software titles: PowerPoint, Excel, and Word. Suppose there are 100 consumers of each type. It costs Microsoft $0 to produce each piece of software. Consumer Types Administrative Assistants Marketing/Sales Accountants Price per each Profit on just that software PowerPoint Total profit on all software $76 $200 $25 A la carte pricing If Microsoft were to sell each of the software individually, what price should it set for each and what would its profits on each be? PowerPoint Excel $100 $100 $250 $ Word $200 $125 $25 Excel Word Bundled Pricing If Microsoft were to only sell the three products as a bundle, what price should they set for bundle and what would profits be? Bundled Price $ Total Profit S Mixed Pricing Suppose that Microsoft offered a bundle of all three for $375, but it also offers a price of $200 for each software separately. What is the new profit level for this pricing scheme?$ Is this mixed-pricing scheme…

Maria manages a bakery that specialises in ciabatta bread, and has the following information on demand and costs: Based on the available information, calculate total revenue, marginal cost and marginal revenue. Present all information in a table format (including the number of bread(s) sold per hour, price, total cost, total revenue, marginal cost and marginal revenue. To maximise profit, how many ciabatta breads should Maria sell per hour, what price should she charge, and how much profit will she make? What is the marginal revenue received by selling the profit-maximising quantity of ciabatta bread? What is the marginal cost of producing the profit-maximising quantity of ciabatta bread?

Suppose 2 gas stations must post their prices for regular gasoline at 6am each morning and cannot change their price during the day. Each gas station has a choice: charge a relatively “low” price or charge a relatively “high” price.  The following shows their profit for the day of each gas station depending upon which price each gas station chooses:   Gas Station  B     Low Price High Price Gas Station A Low Price $2000, $900 $500, $1500   High Price $1200, $1800 $300, $2100 Assume that this is a "one shot" game: Does this game represent a prisoner’s dilemma situation? Why or why not? If the gas stations can talk the night before making their pricing decision and discuss their pricing strategies, what pricing strategy would each gas station choose the next morning?  Assuming both gas stations act rationally, what will be the outcome of the game?  Explain.