Macroeconomics
Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 12, Problem 3SPA
To determine

What is the shutdown point of Pat and what is his profit when he shuts down production temporarily.

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Dana is a dot-com entrepreneur who has established a Web site at which people can design and buy awatch. Dana pays $200 a month for a Web server and Internet connection. The watches that customers design are made to order by another firm, and Dana pays this firm $60 a watch. Dana has no other costs. The table shows the demand schedule for Dana's watches. What is Dana's profit-maximizing output, price, and economic profit? Dana's profit-maximizing output is Dana's profit-maximizing price is $ Dana's economic profit is $ a month. watches a month. a watch. Price (dollars per watch) 100 80 60 40 20 0 Quantity (watches per month) 0 20 40 60 80 100
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