MANAGERIAL ECON.+BUS.STRATEGY (LOOSE)
9th Edition
ISBN: 9781259896422
Author: Baye
Publisher: MCG
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Chapter 6, Problem 21PAA
To determine
Issues arising when contracting between international based BPO.
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Joe is the owner-operator of Joe's Haircuts Unlimited. Last year he earned $175,000 in total
revenues and paid $110,000 to his employees and suppliers. During the course of the year, he
received three offers to work for other barbers, with the highest offer being $60,000 per
year. Is Joe earning a normal profit?
No, he is earning an above-normal profit.
No, but he is earning an accounting profit and that is all that matters.
Yes, but his economic profit is $0 and that is not good.
We cannot be sure, because "normal" profit is a subjective judgment.
No, his economic profit is negative.
Suppose the imaginary company of Roobek is a small, Reno-based American apparel manufacturer specializing in athleisure. The following table presents the brand’s total cost of production at several different quantities.
Fill in the remaining cells of the following table.
Quantity
Total Cost
Marginal Cost
Fixed Cost
Variable Cost
Average Variable Cost
Average Total Cost
(Pairs)
(Dollars)
(Dollars)
(Dollars)
(Dollars)
(Dollars per pair)
(Dollars per pair)
0
60
—
—
1
160
2
220
3
270
4
340
5
450
6
630
On the following graph, plot Douglas Fur’s average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC…
Suppose the imaginary company of Roobek is a small, Cedar Rapids-based American apparel manufacturer specializing in athleisure. The following table presents the brand’s total cost of production at several different quantities.
Fill in the remaining cells of the following table.
Quantity
Total Cost
Marginal Cost
Fixed Cost
Variable Cost
Average Variable Cost
Average Total Cost
(Pairs)
(Dollars)
(Dollars)
(Dollars)
(Dollars)
(Dollars per pair)
(Dollars per pair)
0
60
—
—
1
155
2
220
3
255
4
300
5
350
6
450
Chapter 6 Solutions
MANAGERIAL ECON.+BUS.STRATEGY (LOOSE)
Ch. 6 - Prob. 1CACQCh. 6 - Prob. 2CACQCh. 6 - Prob. 3CACQCh. 6 - Prob. 4CACQCh. 6 - Prob. 5CACQCh. 6 - Prob. 6CACQCh. 6 - Prob. 7CACQCh. 6 - Prob. 8CACQCh. 6 - Prob. 9CACQCh. 6 - Prob. 10CACQ
Ch. 6 - Prob. 11PAACh. 6 - DonutVille caters to its retirement population by...Ch. 6 - Prob. 13PAACh. 6 - Prob. 14PAACh. 6 - Prob. 15PAACh. 6 - Prob. 16PAACh. 6 - Prob. 17PAACh. 6 - Prob. 18PAACh. 6 - Prob. 19PAACh. 6 - Prob. 20PAACh. 6 - Prob. 21PAACh. 6 - Prob. 22PAACh. 6 - Prob. 23PAACh. 6 - Prob. 24PAACh. 6 - Prob. 25PAACh. 6 - Prob. 26PAACh. 6 - Prob. 27PAA
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