Melody owns and runs a hot yoga studio. Assume that Melody has no fixed costs and that her only costs of production are the instructors she hires to teach classes. Melody's output is measured in terms of the number of students who take classes in a given week. When Melody hires one instructor, the studio's output is 400 students. When Melody hires two instructors, the studio's output is 600 students, and when Melody hires three instructors, the studio's output is 700 students. The average total cost when Melody hires two instructors is $10. What is the total cost when Melody hires two instructors

Suppose that a firm's long-run average total costs of producing smart phones increases as it produces between 50,000 and 60,000 smart phones. For this range of output, the firm is experiencing

Economists define profit a bit differently than in accounting. In addition to explicit costs, we also subtract out implicit costs—what you could have earned from the next best alternative.  For example, suppose that you are making $60,000 as an accountant.  You decide to quit your job and open up your own accounting business.  You end up making a profit of $50,000.  How have you done?  Accountants would call this a profit of $50,000 while economists would say that you just lost $10,000 (relative to what you were making before).  So, economists define profits as being equal to total revenues minus total costs, where costs include the opportunity cost. Suppose that a firm had sales revenue of $1 million last year.  It spent $600,000 on labor, $150,000 on capital, and $200,000 on materials.  Calculate the firm’s accounting profit?  If the firm’s factory sits on land owned by the firm that it could rent for $30,000 per year, calculate economic profits.

Then, plot points along the portion of the firm's short-run supply curve that corresponds to prices where there is positive output.

Nathan runs a rare book store. Last year, he earned $35,000 in revenue and had explicit costs of $8,000. Nathan could have made $35,000 driving a boat in a water ski show and received an additional $5,000 if he had used the company's inputs in a different way. Calculate Nathan's economic profit. $

Profit maximization using total cost and total revenue curves Suppose Caroline runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt.     The following graph shows Caroline's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for shirts quantities zero through seven (inclusive) that Caroline produces.         Caroline's profit is maximized when she produces______ shirts. When she does this, the marginal cost of the last shirt she produces is ______, which is (GREATER OR LESS)   than the price Caroline receives for each shirt she sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize her profit) is _____, which is  (GREATER OR LESS)  than the price Caroline receives for each shirt she sells. Therefore, Caroline's profit-maximizing quantity corresponds to the…

teach this

Imagine a small juice producer named " Bilberry Infused Beverages" known for its refreshing beverages. The owner, Louis, keeps track of the production costs. Recently he decided to expand his operations and produce more Juices to meet the increasing demand. Table 15.1 below shows the data he has collected: Complete Table 15.1 below and use the information to answer the question that follows. Table 15:1 Production Costs for Bilberry Infused Beverages Output Total cost Fixed cost Variable cost Marginal Average cost cost Average fixed cost D 30 0 1 10 2 18 3 22 4 56 6 5 64 6 76 7 8 15 15 What is the marginal cost of producing the 8th unit of the good? a) 4 b) 10 12 d) 29

Katie's Quilts is a small retailer of quilts and other bed linen products. Katie currently purchases quilts from a large producer for $100 each and sells them in her store at a price that does not change with the number of quilts that she sells. Katie is considering vertically integrating by making her own quilts. If the fixed cost of vertically integrating is $25,000 and she can produce quilts at $50 per quilt, her total cost of producing quilts, q, herself is C= 25,000 + 50q. How many quilts does Katie need to sell for vertical integration to be a profitable decision? For vertical integration to be profitable, Katie must sell at least quilts. (Enter your response rounded to the nearest whole number.)

will need to upload your answers. Assume a company is producing 600 units of output per day and minimizing total cost with the following isoquant graph. Both the price of labor (w) and the price of capital (r) are $100 per day. Now assume they want to increase production to 800. Use the graph and complete sentences (and the numbers from the situation provided) to explain whether marginal cost would be higher in the short run or long run or will the MC be the same in both the SR and LR. That is, what is the MC is the short run and the MC in the long run? Explain. KI