Economics (7th Edition) (What's New in Economics)
7th Edition
ISBN: 9780134738321
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 13, Problem 13.2.2RQ
To determine
The effect of grooming an additional dog on the profit.
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Kali is a dot-com entrepreneur who has established a Web site at which people can design and buy
aring.
Kali pays $600 a month for a Web server and Internet connection. The rings that customers design
are made to order by another firm, and Kali pays this firm $20 a ring. Kali has no other costs.
The table shows the demand schedule for Kali's
rings.
What is Kali's profit-maximizing output, price, and economic profit?
Price
(dollars per ring)
100
Quantity
(rings per month)
0
80
20
60
40
40
60
20
80
0
100
Kali's profit-maximizing output is
rings a month.
Kali's profit-maximizing price is $ a ring.
Kali's economic profit is $ a month.
Curt grows beautiful orchids. His total fixed cost is $22 a day, and his average variable cost is $2 a plant.
Few people know about Curt's Orchids and he is maximizing his profit by selling 11 orchids a day for $4 a plant.
Curt thinks that if he spends $10 a day on advertising, he can increase his market and sell 29 orchids a day for $4 a plant.
If Curt advertises will his average total cost increase or decrease at the quantity produced?
If Curt advertises and as a result he sells 29 orchids a day for $4 a plant, his
O A. average total cost decreases at the quantity produced
B. average total cost decreases if total cost decreases, and increases if total cost increases
C. average total cost increases at the quantity produced
D. average total cost does not change at the quantity produced
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
average total cost does not change at the quantity produced
O B.
O C.
average total cost increases at the quantity produced
O D. average total cost decreases at the quantity produced
Chapter 13 Solutions
Economics (7th Edition) (What's New in Economics)
Ch. 13 - Prob. 13.1.1RQCh. 13 - Prob. 13.1.2RQCh. 13 - Prob. 13.1.3RQCh. 13 - Prob. 13.1.4PACh. 13 - Prob. 13.1.5PACh. 13 - Prob. 13.1.6PACh. 13 - Prob. 13.1.7PACh. 13 - Prob. 13.1.8PACh. 13 - Prob. 13.1.9PACh. 13 - Prob. 13.1.10PA
Ch. 13 - Prob. 13.2.1RQCh. 13 - Prob. 13.2.2RQCh. 13 - Prob. 13.2.3RQCh. 13 - Prob. 13.2.4PACh. 13 - Prob. 13.2.5PACh. 13 - Prob. 13.2.6PACh. 13 - Prob. 13.2.7PACh. 13 - Prob. 13.2.8PACh. 13 - Prob. 13.2.9PACh. 13 - Prob. 13.3.1RQCh. 13 - Prob. 13.3.2RQCh. 13 - Prob. 13.3.3RQCh. 13 - Prob. 13.3.4RQCh. 13 - Prob. 13.3.5PACh. 13 - Prob. 13.3.6PACh. 13 - Prob. 13.3.7PACh. 13 - Prob. 13.3.8PACh. 13 - Prob. 13.3.9PACh. 13 - Prob. 13.3.10PACh. 13 - Prob. 13.3.11PACh. 13 - Prob. 13.3.12PACh. 13 - Prob. 13.4.1RQCh. 13 - Prob. 13.4.2RQCh. 13 - Prob. 13.4.3RQCh. 13 - Prob. 13.4.4RQCh. 13 - Prob. 13.4.5PACh. 13 - Prob. 13.4.6PACh. 13 - Prob. 13.4.7PACh. 13 - Prob. 13.4.8PACh. 13 - Prob. 13.4.9PACh. 13 - Prob. 13.5.1RQCh. 13 - Prob. 13.5.2RQCh. 13 - Prob. 13.5.3PACh. 13 - Prob. 13.5.4PACh. 13 - Prob. 13.5.5PACh. 13 - Prob. 13.5.6PACh. 13 - Prob. 13.5.7PACh. 13 - Prob. 13.6.1RQCh. 13 - Prob. 13.6.2RQCh. 13 - Prob. 13.6.3PACh. 13 - Prob. 13.6.4PACh. 13 - Prob. 13.6.5PACh. 13 - Prob. 13.6.6PACh. 13 - Prob. 13.1CTECh. 13 - Prob. 13.2CTECh. 13 - Prob. 13.3CTE
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- 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 O D. average total cost decreases at the quantity producedarrow_forwardWestchesser Gloves is a monopolistically competitive firm that sells leather gloves. Use the graph to highlight the area of profit or loss and answer the questions, Price per pair (5) 10 20 Marginal profit or loss: $ Aver co Pairs of gloves (in thousand) Demand 70 80 90 100 Profit or loss Calculate Westchesser's profit or loss at the profit-maximizing price. What will happen to the number of firms in this industry in the long run? Firms will enter this industry, increasing the price at which each firm can sell their gloves until firms begin to earn normal profits. O Firms will exit this industry, increasing the price at which each firm can sell their gloves until firms begin to carn normal profits. O Firms will exit this industry, decreasing the price at which each firm can sell their gloves until firms begin to carn normal profits. O Firms will enter this industry, decreasing the price at which each firm can sell their gloves until firma begin to carn normal profitsarrow_forwardMaria 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?arrow_forward
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